Nicholas Winterton: I visited a secondary school in my constituency—Tytherington high school—last Friday and it is doing an excellent job. The Secretary of State will know that the well known independent education foundation, Edge, recently stated in a report that one in four pupils is being failed by their secondary school and that a quarter of parents are also deeply concerned that their child is being let down and believe that the education system needs an overhaul. That is slightly different from the response that the Secretary of State has given. Is there not a problem? Will the right hon. Gentleman give the matter serious consideration, as it is an issue of concern to a lot of parents?

Edward Balls: A very important report from Ofsted published just a few weeks ago considered the 12 top performing secondary schools in the most disadvantaged areas and showed that the vital factors were the quality of their leadership, their commitment to consistency, the quality of their teaching and the high expectations that they had of every child in their schools. The fact is that many schools in challenging circumstances are delivering brilliant results. We want to make sure that that happens everywhere, at all times. That is why we are the party that is taking forward the expansion of trusts, academies and specialisms, to make sure that the best leadership is put to work in schools right across the country.

Edward Balls: I care very much about who is teaching our kids, which is why I am proud that, as I said earlier, we have the best generation of teachers that we have ever had. If the old schools Minister did not provide a proper answer to my hon. Friend's question, I will make sure that the new one does so forthwith.

Michael Gove: Actually, I asked the Secretary of State questions on "The World at One" just 90 minutes ago, and I am surprised that that experience has been wiped clean from his memory, because once again his figures and arguments were utterly discredited. Will he answer the questions that I asked, which were about the science curriculum? The people who work for the right hon. Gentleman point out that, under him, that curriculum has, I am afraid, deteriorated. Ofqual, the exams watchdog, has said that there has been a fall in the quality and rigour of science exams since 2006. Sir Peter Williams, who chaired the Government's maths reviews, has said:
	"I don't think there's any doubt whatsoever that absolute A-level standards have fallen".
	Sir Adrian Smith was No. 2 at DIUS—remember that?—and he has said that the Government's plans for science diplomas are wrong, that they simply have not got their GCSE and A-levels right, and that their whole approach to science is poorly thought through. Until recently, Ralph Tabberer was the man responsible for schools in the Department, but now he has blown the whistle by saying that current education policies fail to emphasise scholarship and high-quality study, and that the Secretary of State is simply going in the wrong direction.
	All those experts have worked up close and personal with the Secretary of State. Are they all wrong?

Diana Johnson: First, may I thank my hon. Friend for his kind remarks and welcome? I pay tribute to his chairmanship of One Nottingham, which has at its heart early intervention strategies to make a real difference to the life chances of children and young people in Nottingham. I think that the Department for Children, Schools and Families will watch very carefully what happens with the life skills programme from September onwards, and I am sure that there will be lots of lessons that we can learn. The issue of PHSE is out for consultation at the moment. One particular question is what the lessons will be called, and I would urge anyone who has a strong view about that to make sure that they take part in that consultation, which runs until the end of July.

Tim Loughton: May I add my welcome for the hon. Lady's addition to the Secretary of State's burgeoning team, and the addition of the right hon. Member for Bristol, South (Dawn Primarolo), who will be the third Minister for Children that I have faced in recent years? Can the Parliamentary Under-Secretary tell me why, after 12 years of Labour Government and all the changes made to PSHE, we still have the highest teenage pregnancy rate in Europe, and still have a soaring rate of chlamydia and other sexually transmitted infections? Why do we have an under-age drinking problem that is among the worst in the world, according to the World Health Organisation, and why are the Government falling woefully short of providing the promised number of school nurses to work with clusters of schools as a major means of promoting better children's health?

Dawn Primarolo: As the hon. Lady knows, screening for STIs and chlamydia in particular, which is being extended all the time, is giving clear indications of the number of young people who may be infected. She is right that we need decent sex and relationship education for young people that enables them, with their parents—but young people in particular—to resist the pressures when they do not want to be sexually active. Regrettably, a quarter to a third of under-16s choose to be sexually active, and we must ensure that services are rapidly available to them to enable them to be safe and to protect their health. I am sure she would welcome proper directed advice being made available to young people, through work with schools, parents and the health service.

Dawn Primarolo: My hon. Friend is absolutely correct when he points to the improvements in the diagnostics of STIs. I hear his point about the importance of a national, high-level campaign, but, looking in partnership with the Minister for public health at all the available research, I must say that it is quite clear that targeted and specific information for young people produces the best results. We will continue to follow that strategy, but I shall reflect on my hon. Friend's comments and certainly bear them in mind.

Iain Wright: I certainly agree with those last comments, the importance of which are absolutely crucial: we must ensure that adequate, safe and high-quality child care provision is provided to reassure parents at all times, including during the summer months. I concede to the hon. Lady the point about the number of child minders having fallen over the past two quarterly returns, but I must tell her that the number of places that have been offered has risen slightly, thus providing a greater supply of child care through child minders. On her point about cross-governmental working to ensure that work pays under the welfare system, I must point out to her that the tax credit system has been a huge success and parents can get substantial help towards the cost of registered child care. Working families can claim up to 80 per cent. of their child care costs through the tax credit system, and that equates to £150 a week for one child and up to £240 a week for two or more children.

Robert Goodwill: Are not some schools guilty of sending mixed messages to parents when, on the one hand, they caution against taking holidays during term time but, on the other, organise ski trips to countries whose language is not being taught at that school? That does not take only children out of education but key members of staff at the same time. Would not such trips be better taken during the holidays?

Edward Balls: I will do so, and in fact we announced last week more than 100 different projects totalling £200 million, in order to invest in the co-location of services on school sites, which often include health services and wider support for parents. That vision of the 21st century school, with services coming together, is a vital part of our vision for the future of schools. We want to ensure that every parent and child gets the help that they need, so that children can then learn when they get to school.

Annette Brooke: The Government's target to halve teenage pregnancies by 2010 will clearly not be met. Indeed, I have heard dates such as 2039 mentioned at the earliest. Notwithstanding that, what action will the Government take to extend and modify the teenage pregnancy strategy beyond 2010 to support all those working on this vital issue up and down the country? That should be done sooner rather than later.

Vernon Coaker: My hon. Friend will know that, in a recent Ofsted inspection of 18 local authorities, eight were found not to be complying with their legal requirement to provide alternative provision for young people who have been permanently excluded from school, six days after that exclusion. We will write to every director of children's services to remind them of their legal responsibility, and we are putting together an action plan to ensure that the entitlement of young people who have been permanently excluded from school is met, and that the provision is of the right quality. I can also assure my hon. Friend that, in addition to receiving that letter, which I intend to write in the near future, those authorities can expect me to check on the progress that they have made in a few months' time. It is wrong that pupils who have been permanently excluded from school are not being given the entitlement to education that they deserve, and we are determined to do something about that.

Dari Taylor: Will my right hon. Friend confirm that the education maintenance allowance will continue into the long-term future? They have persuaded many young people from low income families in my constituency to stay on at school post-16, and we all want to hear that there is no question mark over this policy.

Gordon Brown: With permission, Mr. Speaker. The whole House will want to join me in expressing condolences to the family and friends of the two soldiers who recently lost their lives serving in Afghanistan: Lieutenant Paul Mervis of 2nd Battalion the Rifles; and Private Robert McLaren of 3rd Battalion the Royal Regiment of Scotland—the Black Watch. Their lives, their service and their contribution will not be forgotten. Their sacrifice reminds us of the dangers our serving armed forces confront every day and of why we must continue to give them all our support.
	Our troops first went into Iraq in March 2003 and now they are coming home. In total, 120,000 men and women have served in Iraq during the last six years, so it is fitting that I should now come to the House to talk of their achievements through difficult times; to chart the new relationship we are building with Iraq; and to set out our plans for an inquiry into the conflict.
	As always, we can be supremely proud of the way our armed forces carried out their mission—proud of their valour in the heat of combat, which is recognised in many citations for awards and decorations; and proud of their vigilance and resolution amid the most difficult imaginable conditions and the ever-present risk of attack by an unseen enemy. Today we continue to mourn and to remember the 179 men and women who gave their lives in Iraq in the service of our country.
	In my statement to the House last December, I set out the remaining tasks in southern Iraq for our mission: first, to entrench improvements in security by putting Iraqis in charge of their own defence and policing; secondly, to support Iraq's emerging democracy particularly through the provincial elections; and, thirdly, to promote the reconstruction of the country, economic growth and basic services like power and water in order to give the Iraqi people what matters most for their livelihoods in years to come—that is, a full stake in their economic future. I can report that those three objectives are being achieved, and that, thanks to our efforts and those of our allies over six difficult years, a young democracy has replaced a vicious 30-year dictatorship.
	In recent months, we have completed the training of the 9,000 troops in 14 division of the Iraqi army, who are now fully in charge of the security of Basra. It was 14 division who, with our and the Americans' help, took on the militia in the crucial Operation Charge of the Knights in spring last year. Since then, violence and crime in the Basra region have continued to fall, while levels of violence across Iraq as a whole are at their lowest since 2003. Provincial elections were held peacefully on 31 January with 7 million Iraqis turning out to vote for 440 different political groupings. The Iraqis ran the elections themselves with only three violent incidents across the entire country, and preparations are now under way for national elections on 31 January 2010.
	Since 2003, the UK has spent more than £500 million in Iraq—for humanitarian assistance, infrastructure and promoting economic growth. Support to the health sector has included 189 projects in Basra, including the refurbishment of Basra general hospital and the building of the Basra children's hospital. As a whole, the international community has rehabilitated more than 5,000 schools, as well as constructing entirely new schools and new classrooms in existing schools. Despite high unemployment and the scale of the global recession, economic growth in Iraq this year is predicted to be nearly 7 per cent.
	Significant challenges remain, including that of finding a fair and sustainable solution to the sharing of Iraq's oil reserves, but Iraq's future is now in its own hands, in the hands of its people and its politicians. We must pay tribute to the endurance of the Iraqi people; we will pledge to them our continuing support. However, it will be support very different from the kind that we have provided for the last six years. As the House knows, our military mission ended with the last combat patrol in Basra on 30 April. As of today, there are fewer than 500 British troops in Iraq, with more returning home each week.
	On the day of that last combat patrol in April, I welcomed Prime Minister Maliki and most of his Cabinet to London. We signed together a declaration of friendship, partnership and co-operation defining the new relationship between our two countries for the future. At the request of the Iraqi Government, a small number of British Navy personnel—no more than 100—will remain in Iraq for long-term training of the Iraqi Army. Royal Navy ships will continue to protect the oil platforms on which Iraq's exports depend, and we will continue to offer training to the Iraqi army as part of a wider NATO mission. We will also offer training opportunities at Sandhurst and elsewhere in the United Kingdom for Iraqi officers of high potential. At the core of our new relationship, however, will be the diplomatic, trading and cultural links that we are building with the Iraqi people, supporting British and other foreign investors who want to play a role in the reconstruction of southern Iraq.
	I have discussed with Prime Minister Maliki a plan for British companies to supply expertise to the Iraqi Oil Ministry. Earlier this year, the Mesopotamia Petroleum Company signed a joint venture worth $400 million. Shell is working with the Southern Oil Company to bring to market some of the 700 million cu ft of gas that is currently lost each day by flaring. British companies are now competing for further contracts, and Rolls-Royce and Parsons are currently discussing with the Iraqi Ministry of Electricity proposals for a new power generation infrastructure worth an initial $200 million.
	British funding will support lending to 1,000 businesses in southern Iraq, and a youth employment programme that should give training and work permanently to young Basrawis could be rolled out across the whole of Iraq as a result of its success. We are supporting the Iraqi Transport Ministry in the resumption of civilian flights; the Department for International Development and the British Council are working on a major education programme; and Iraq has already identified its first 250 students, an early initiative in Britain's contribution to Iraq's plans for 10,000 overseas scholarships for Iraqi students.
	Issues in the region still confront us. Iran is an independent nation that deserves our respect, and the Iranian people are a proud people who deserve democracy. That is why the regime must address the serious questions that have been asked about the conduct of the elections. The way in which the regime responds to legitimate protests will have implications for Iran's relationships with the rest of the world in future.
	The House will note the speech made by Prime Minister Netanyahu, in which for the first time he endorsed a two-state solution. His speech was an important step forward, but there remains a long road ahead of us. I will speak to him again later today to impress on him the importance of freezing settlements.
	With the last British combat troops about to return home from Iraq, now is the right time to ensure that we have a proper process in place to enable us to learn the lessons of the complex and often controversial events of the last six years. I am today announcing the establishment of an independent Privy Counsellor committee of inquiry which will consider the period from summer 2001, before military operations began in March 2003, and our subsequent involvement in Iraq right up to the end of July this year. The inquiry is essential because it will ensure that, by learning lessons, we strengthen the health of our democracy, our diplomacy and our military.
	The inquiry will, I stress, be fully independent of Government. Its scope is unprecedented. It covers an eight-year period, including the run-up to the conflict and the full period of conflict and reconstruction. The committee of inquiry will have access to the fullest range of information, including secret information. In other words, its investigation can range across all papers, all documents and all material. It can ask for any British document to be brought before it, and for any British citizen to appear. No British document and no British witness will be beyond the scope of the inquiry. I have asked the members of the committee to ensure that the final report will be able to disclose all but the most sensitive information—that is, all information except that which is essential to our national security.
	The inquiry will receive the full co-operation of the Government. It will have access to all Government papers, and the ability to call any witnesses. The objective is to learn the lessons from the events surrounding the conflict. It is on that basis that I have accepted the Cabinet Secretary's advice that the Franks inquiry is the best precedent. Like the Franks inquiry, this inquiry will take account of national security considerations—for example, what might damage or reduce our military capability in the future—and evidence will be heard in private. I believe that that will also ensure that evidence given by serving and former ministers, military officers and officials is as full and candid as possible. The committee will publish its findings in as full a form as possible. These findings will then be debated in the House of Commons and the House of Lords. It is in these debates, as well as from the report itself, that we can draw fully upon the lessons learned in Iraq. So while the format is the same as that of the Franks inquiry, we have gone much further in the scope of the inquiry. No inquiry has looked at such a long period, and no inquiry has the powers to look in so much breadth, for while Franks looked only at the run-up to the Falklands conflict, the Iraq inquiry will look at the run-up to conflict, the conflict itself and the reconstruction, so that we can learn lessons in each and every area. The inquiry will take into account evidence submitted to previous inquiries, and I am asking members of the committee to explain the scope, width and breadth of its work to Opposition leaders and the Chairs of the relevant parliamentary Committees.
	In order that the committee is as objective and non-partisan as possible, the membership of the committee will consist entirely of non-partisan public figures acknowledged to be experts and leaders in their fields. There will be no representatives of political parties from either side of this House. I can announce that the committee of inquiry will be chaired by Sir John Chilcot and it will include Baroness Usha Prashar, Sir Roderick Lyne, Sir Lawrence Freedman and Sir Martin Gilbert. All are, or will become, Privy Counsellors.
	The committee will start work as soon as possible after the end of July. Given the complexity of the issues it will address, I am advised that it will take a year. As I have made clear, the primary objective of the committee will be to identify lessons learned. The committee will not set out to apportion blame or consider issues of civil or criminal liability.
	Finally, I am sure the whole House will join me in paying tribute to the courage and dedication of every one of our armed forces, and also our civilian personnel, who have served our country with such distinction in Iraq over six years, and who will continue to do so in Afghanistan and on peacekeeping missions around the world.
	At its peak, a force of 46,000 served tours of duty in support of operations in Iraq. In total, 120,000 men and women served over the period of the entire conflict: 179 Britons died and 222 were seriously or very seriously injured, and we remember them all today.
	I said in my statement in December that the memorial wall in Basra would be brought home. I can now confirm that it will form part of a new memorial wall to be built at the national arboretum in Staffordshire, and just as it is right that we should pay tribute to the memory of those who have fallen, and to the wounded, so it is right to give thanks for the safe return of their comrades, to show our gratitude to all those who have served, and for us as a nation to celebrate the enduring achievements of all our armed forces. So I can also tell the House that in the autumn of this year a service of thanksgiving and commemoration will be held in Westminster abbey.
	We salute our forces today. Through their work, the work of their American and coalition comrades and of the Iraqi security forces, and supported by the courage and vision of those within Iraq led by Prime Minister Maliki, Iraq is emerging from the shadow of 30 years of brutal dictatorship and then conflict. Today, Prime Minister Maliki and his Government can work together for a peaceful and prosperous future. That they can now do so is the ultimate tribute to all who served in Iraq: to their skills, commitment and sheer professionalism; to their great and enduring courage in conflict; and to their immeasurable contribution to reconstruction and to peace.
	I commend this statement to the House.

Nicholas Clegg: I should like to add my expressions of sympathy and condolence to the family and friends of Lieutenant Paul Mervis and Private Robert McLaren, who tragically lost their lives in Afghanistan in this last week. Of course I join the Prime Minister in paying tribute to our brave servicemen and women, who have served our country so courageously in Iraq over the past six years. In particular, I pay tribute to the 179 who have lost their lives. They and their families are in our thoughts today.
	I passionately believe that we were wrong to invade Iraq, but I am second to none in my admiration for the bravery and dedication of our servicemen and women. Everyone knows that the invasion of Iraq was the biggest foreign policy mistake that this country has made in generations—the single most controversial decision taken by Government since Suez—so I am staggered that the Prime Minister is seeking to compound that error, which was fatal for so many of Britain's sons and daughters, by covering up the path that led to it.
	The Liberal Democrats have called for an inquiry into the build-up and conduct of the Iraq war for many years. I suppose we can be grateful that, finally, the Prime Minister has acceded to that demand. However, as is so often the case, he has taken a step in the right direction but missed the fundamental point. A secret inquiry, conducted by a clutch of grandees hand-picked by the Prime Minister, is not what Britain needs. Does the Prime Minister not understand that the purpose of an inquiry is not just to produce a set of conclusions but to allow the people of Britain to come to terms with a mistake made in their name?
	I have met the families of the soldiers who have lost their lives in Iraq and just an hour ago they asked me to speak in their name and to tell the Prime Minister that nothing short of a fully public inquiry, held in the open, will satisfy them. Will he at least listen to what those grieving families need?
	The Prime Minister says that the inquiry has to be held in private to protect national security, but it looks to me suspiciously as though he wants to protect his reputation and that of his predecessor instead. Why else would he want the inquiry to report after the general election when we could have at least interim reports before then? It is perfectly possible to have a limited number of sensitive sessions in camera while retaining the fundamental principle that the vast bulk of the inquiry—not just a few public sessions, as recommended by the Conservative leader—should be open to all.
	I am grateful that the Prime Minister has listened to my representations and has extended the inquiry to cover the full origins of the war and given it full access to the documents and files that it will need. However, I am disappointed that he made such a feeble attempt to secure consensus on the panel that will conduct the inquiry. The experience of successfully established inquiries, such as the one now being held in the Netherlands, shows that consensus can be secured only if the Government conduct painstaking consultation over a prolonged period of time. Why did the Prime Minister not even attempt that sort of constructive discussion with other parties?
	The Government must not be allowed to close the book on this war as they opened it—in secrecy. Last week, the Prime Minister stood at the Dispatch Box and spoke eloquently about the need for more public accountability and transparency. This was his first test. He has failed. He has chosen secrecy instead. For six years, we have watched our brave servicemen and women putting their lives on the line for a war that we did not support and could not understand. To rebuild public trust, the inquiry must be held in public. Will the Prime Minister, even now, reconsider? Will he make this inquiry a healing process for the nation, or will he turn his back on the legitimate demands of the British people once again?

Gordon Brown: Every Member has the greatest respect for every family that is grieving as a result of what has happened in Iraq. Nothing that anybody says today takes away from our concern about the needs of those families and our respect for them. I want to answer the right hon. Gentleman's specific points about the inquiry, however.
	The inquiry is to learn the lessons of what has happened. The inquiry will cover the run-up to the war, the conflict itself and reconstruction after the conflict. I can think of no remit that could be broader than that—to cover the events leading up to the conflict, and the reconstruction after it. The inquiry will cover eight years of our history, and will be a very detailed piece of work that has to be done.
	The inquiry will be able to call any witness, and for any evidence. The report will be published and debated in this House. That is exactly how the Franks inquiry went about its work. To be fair to the right hon. Gentleman, he disagrees with using Franks as a model, although the main Opposition party has always wanted that. However, we must take into account national security considerations, and what is known about the capability of our armed forces and security services, and the missions they are undertaking at the moment. We also have to take into account what serving officers will want to say to the inquiry. I think that the right hon. Gentleman will come to recognise that all those things involve a degree of confidentiality that would not suit a public inquiry, where all witnesses give evidence in public. The lesson of public inquiries is that they take many, many years, because everybody who comes before one wants to be represented by a lawyer. We know that from other public inquiries that are taking place at the moment, one of which has already taken eight years and is no nearer to completion now than it was a year ago.
	I also ask the right hon. Gentleman to bear it in mind that the matter will come back to the House. It is up to the inquiry to decide how long it will take to do its work. I think that the best way for it to report to the House is with a comprehensive piece of work, rather than through piecemeal reports. In the end, the members of the inquiry team will decide how long it will take them to do the work, but I think the right hon. Gentleman will agree that it will take some time to cover eight years of history in the most detailed way. All witnesses and all evidence can come before the inquiry. I hope that he will agree, on reflection, that those who have been selected and asked to take part in the inquiry are people of high reputations who can do a very good job of work for this country.

Ann Clwyd: As one who supported the Iraq war, I did so on human rights grounds. I saw no secret material and had no private briefing, but I had a 30-year involvement with the Iraqi opposition. I personally would want assurances from the inquiry as to why, prior the war, this country failed to indict leading members of the Iraqi regime when we had the legal evidence to enable us to do so.

Robert Marshall-Andrews: In the history of the conflict, two political matters cry out for explanation more than any other. The first is why the House was never informed of the contents of the Downing street minute that revealed knowledge six months before the conflict that the Bush Administration had decided on the inevitability of war, whatever the concessions that were made. The second matter that requires explanation is why the Attorney-General's opinion on the legality of the war was never shown to the Cabinet before the decision to go to war was made. Neither of those matters—neither of them—affects state security. Neither of them requires phalanxes of lawyers. Why cannot they be ventilated and canvassed in public, and without delay?

Gisela Stuart: This inquiry is part of a process of holding the Executive to account, but this House has mechanisms for holding the Executive to account: they are called Select Committees. Any member of the Select Committee on Foreign Affairs will have first-hand experience of the limitations of a Select Committee's ability to hold the Executive to account. I, as a Member of Parliament, find it extremely difficult to accept that we are giving privileges to people outside this House, under the guise of independence, when we could have an inquiry that gave Members and Select Committees access to the kind of documents that we are giving to those people; when we could have hearings in public and in private; and when we could come to a view.

Gordon Brown: I disagree with the hon. Gentleman. The inquiry has to take into account the interests of our national security and to look at the issues that reflect on the capability and deployment of our troops, and it may not be best that that is made public. It also has to get people to talk frankly about what they believe are the lessons to be learned from the inquiry. If the inquiry were surrounded by lawyers and everybody else in a public arena, that would be more difficult, as the hon. Gentleman would have to acknowledge.
	I believe that the inquiry will be thorough and independent, and I believe that the results of the inquiry will be reported to this House. For weeks and months, people have been calling for a Franks-style inquiry; it is quite extraordinary that now that they have a Franks-style inquiry, they are trying to oppose it on cynical grounds.

Nick Herbert: I beg to move,
	That this House recognises the serious impact that the economic downturn is having across the country; notes the specific impact of the recession on rural communities, with recent job losses affecting key rural industries; further notes with concern that levels of economic inactivity are higher in rural areas and believes that increased redundancies will fall particularly hard on small rural communities; further notes that rural communities, already suffering from the closure of key services and the Government's failure to provide affordable rural housing, are finding it harder to cope with rising unemployment, with those out of work lacking adequate support; is concerned that the recession is exacerbated by the burden of regulation, increased payroll costs and problems accessing credit for small businesses; believes that too little say has been given to people in rural areas with decisions taken centrally; and calls on the Government to show more respect to rural communities and return power to local people.
	We have called this debate because we want to draw attention to the impact that the recession is having on rural communities. In many ways, those communities are already fragile and when faced with economic difficulties, they can be left even more exposed. We also want to ensure that the economic potential of rural areas is harnessed, so that they can emerge stronger from the recession and help contribute to the UK's recovery by driving sustainable growth.
	I am disappointed that the Secretary of State for Environment, Food and Rural Affairs is not here in person to put the Government's case, particularly as only last week the Prime Minister said that he wanted to make the Executive more accountable to Parliament and the people. So much for the latest relaunch. Perhaps we should not be surprised. The word is getting around in the countryside that the Secretary of State is not really interested in the rural aspect of his brief, and today he has proved the point. In his place we have the junior Minister, the Minister of State, Department for Environment, Food and Rural Affairs. I mean no personal disrespect, and I genuinely congratulate him on his appointment, but he is the fifth Minister of State in five years. What signal does that send to rural communities about the priority that this Government give to farming, rural people and the countryside?

Nick Herbert: The hon. Gentleman must have extraordinary prescience, because I was about to come to that very point. Support for jobless people in remote areas is crucial, yet nearly one fifth of rural jobcentres were closed in the past two years, when the number nationally has been increasing. I wonder whether the Minister would like to say something about that or about its impact on people in the countryside who have lost their jobs and are now seeking work.
	Citizens Advice reports that the increase in debt cases among people living in rural areas in the second half of last year was more than twice the increase in urban areas, with a 20 per cent. rise in cases among people in sparsely populated rural villages. In the final quarter of last year, insolvencies and bankruptcies were higher in regions with predominantly rural populations. The Country Land and Business Association's latest rural economy index survey has found that confidence is improving, but half of the respondents still lacked confidence in the outlook for the rural economy.
	In the Secretary of State's response to the rural advocate's report on the economic potential of the rural economy, he said that there was
	"no such thing as a separate 'rural economy'".
	Of course I understand his point, and there are links between the urban and rural economies, but the danger of such remarks is that they suggest that Ministers do not appreciate the realities of rural life. The simple fact is that, in a rural area, people's work and services are often further away from where they live. Government measures such as increasing fuel duty and the tax on 4x4 vehicles can therefore hit rural workers, particularly the low paid, disproportionately hard. The Commission for Rural Communities has noted that fewer than half the residents in villages and hamlets live within 13 minutes of a bus stop with a service at least once an hour, compared with 95 per cent. of urban residents.
	For rural small businesses and people working from home, access to the internet is crucial. We are told that the vast majority of the population can get some form of broadband, with 97.9 per cent. of households currently getting a speed of at least 1 megabyte a second. That sounds good, but the truth is that half a million households cannot obtain those speeds, and more than half of those get no acceptable level of internet connection at all, as I know from my rural constituency and I am sure many of my hon. Friends will know from theirs.
	Only last week, at the South of England show, one of my constituents in the south downs area—which is less than 50 miles from London—told me that he had been paying £11,000 a year for a 2 megabyte connection to his converted farm buildings. Such costs for a poor connection, which would be cheaply available in an urban area, are undermining farm diversification and the potential for rural development. For businesses in the future, broadband speed will really matter, so the Government's commitment to making 2 megabyte broadband available to "virtually everyone" is welcome. However, we will await Lord Carter's final report later this week to find out what "virtually everyone" really means. There is a risk that the digital divide between cities and rural areas will grow wider still, when super-fast fibre-optic broadband is rolled out to cities and large towns, but not to rural areas.

Nick Herbert: I agree with my right hon. Friend. As I said, there is a danger of a growing digital divide—we already have a digital divide—and the challenge for the Government is how higher-speed broadband can be financed. We hope to hear more about that from the Government this week, including whether there is any potential to lever in substantial private finance to ensure wider access to high-speed broadband. Another crucial issue for the long-term potential of economic growth in rural areas in the digital age is having a decent broadband link, which many rural areas are simply lacking at the moment. This should be regarded as an infrastructure challenge, which must be discussed further, but no one should underestimate the huge sums of money that would be involved.
	The untapped potential of rural businesses could be key to driving the recovery of the UK economy and helping to create sustainable growth for the long term. Stuart Burgess, the Rural Advocate and chairman of the Commission for Rural Communities, said that
	"our rural communities have much unfulfilled potential... The challenge is to extend growth and productivity across more firms, employees and communities in rural England."
	In the short term, however, we need to help rural businesses weather the downturn. As the Government have admitted,
	"rural economies are heavily dependent on small and medium-sized businesses and this is one of the sectors thought to be most under threat"
	from the downturn. We have thus proposed a range of positive measures to get the economy moving again that will also help businesses in rural areas.
	We have called for a reduction in corporation tax rates on small companies from 22p to 20p by reducing complex reliefs and allowances. The majority of rural enterprises employ fewer than 10 people and many employ fewer than five. In order to help with payroll costs, so that rural businesses can keep staff on and employ new staff that are looking for work, we have argued for cuts of 1p for at least six months in national insurance contributions for businesses with fewer than five employees. We would give smaller businesses greater access to the £125 billion Government procurement budget by cutting red tape, advertising online all contracts worth more than £10,000 and simplifying the pre-qualification process.
	We would help thousands of small rural firms by making business rate relief automatic for eligible small businesses in England, and we would reduce the burden of regulation to give businesses more freedom and greater flexibility. The problems of steep increases in the costs of loans and overdrafts for otherwise successful businesses during seasonally quiet periods is a particular challenge for tourism and other businesses prevalent in rural areas.
	Of the 25 local authorities with the highest unmet demand for affordable credit, four are classified as rural and eight have significant rural populations. Our proposed £50 billion national loan guarantee scheme to get credit flowing again would also help, as my hon. Friend the Member for North-West Norfolk (Mr. Bellingham) argued. As the Commission for Rural Communities has argued, businesses need more flexibility for paying VAT, so we would allow small and medium-sized enterprises to defer their VAT bills for up to six months, potentially meaning the difference between survival and failure. Those are all practical measures to help the rural economy in the current downturn.

Nick Herbert: I shall make some progress, if the hon. Gentleman does not mind.
	In the long term, we need to ensure that rural communities are vibrant and viable. That means ensuring that there is access to local services, and providing affordable housing. The present Government's record on rural services is lamentable. Hundreds of small rural schools have closed over the past decade, despite Labour's promise to keep them open. As the Minister knows only too well, 1,400 rural communities have lost their post offices since 2000. Two thousand local shops are closing every year, and, according to one estimate, 42 per cent. of small English towns and villages no longer have a shop of any kind.
	The beer duty increase in the Budget has further damaged a fragile sector and we are seeing rural pubs closing at the rate of two a day. The average annual wage in the most rural areas is £7,000 lower than it is in the most urban areas, but the average price of a home for first-time buyers is £16,000 more. There is clearly an urgent need for affordable rural housing, but Labour's top-down housing targets have failed to deliver. We need to reverse the trend of centralisation and end the years of thoughtless Whitehall diktat so that the needs of rural communities are respected. We will allow towns and villages to create local housing trusts to build new housing to benefit their communities. Provided that there is strong local support, those bodies will have the power to develop new homes without the burdens of the regional planning system.
	Three years ago, Members on both of the House supported the Bill that became the Sustainable Communities Act 2007, which requires central Government to make clear how much money they spend on local services in each area and gives councils and communities a far greater say in how that money is spent. The Government agreed that reports on public spending under the Act would include quangos, but Ministers are now backtracking on that pledge, which is unacceptable. The public want more influence over decision-making, and that means more information.
	It is time to go further and return real power and decision-making to individuals and communities wherever possible, so that people have a genuine say in the matters that affect them locally. This Government have been obsessed with regional government, and a plethora of quangos are now ruling rural areas and disbursing funds without local accountability. We will allow councils to establish their own local enterprise partnerships to take over the economic development functions and funding of the regional development agencies. If power is devolved and decisions are taken as close as possible to the people they affect, the social value of rural services, as well as their economic value, will be appreciated. Above all, people in rural communities would be reconnected with decision making at a time when politics in Westminster has never been more remote from the people.
	This Government have presided over a decade of disrespect for rural communities. They have ignored local concerns and imposed national policies regardless of their impact. It is time for a different approach. Of course rural areas deserve fair treatment, but it is not just a question of fairness. All parts of the country are suffering in the recession, and the rural economy could be a great national resource for the future. It could help to deliver jobs from growth in small businesses and new sustainable forms of working, but making that happen will require a Government who understand rural areas and are willing to listen, and a Government who respect rural communities and are ready to trust and empower them. As I am afraid the Secretary of State has demonstrated by his absence from this debate today, that leadership will not come from this tired and discredited Government.

Jim Fitzpatrick: I am only too pleased to apologise to the hon. Gentleman on behalf of the Department, and I will endeavour to look up his correspondence and respond at my earliest opportunity.
	The rural White Paper in 2000 set out for the first time a full rural affairs agenda. DEFRA, the first Department with an explicit remit for rural affairs, was created in 2001. Having reviewed the White Paper in early 2004, we followed up with the rural strategy later that year. It was far-reaching, and aimed to build on the economic success of the majority of rural areas, while tackling those that were felt to be at either economic or social disadvantage. That strategy still underpins the Government's approach to rural affairs; it is one of equity and fairness.
	As we now know, one in five people in England lives in a settlement of fewer than 10,000 inhabitants—that is about 10 million people in all. Our rural communities are home to about 1 million businesses, providing more than 5.5 million jobs. There are more businesses for every 10,000 people in rural areas than there are in urban areas.

Jim Fitzpatrick: I understand that the DWP has suspended any further closures, particularly in these difficult economic times, but I recognise that there has been a rationalisation of jobcentres and benefits agencies, the creation of Jobcentre Plus and an attempt to ensure that appropriate and necessary assistance was provided as efficiently as possible.
	Economic development in a rural context needs to be based on a 21st-century understanding of businesses in rural areas—one that is not constrained by a nostalgia but that recognises the dynamism, diversity, interconnectedness and value of our rural businesses and communities. In many respects, rural communities are no different from any other; people there want not only well-paid and secure employment and somewhere decent to live, but long and healthy lives and a good education for their children. It is therefore perhaps no surprise that the impacts of the current recession on rural areas are very similar to those in urban areas. More specifically, when the comparison is made with urban areas the emerging picture in rural England is one of lower risk, higher resilience and higher recovery prospects. So it is worth pausing for a minute to examine what is really happening in rural areas.
	In April 2009, 2.5 per cent. of the working-age population in rural England were claiming unemployment-related benefits, compared with a figure of 4.6 per cent. in urban areas. The labour force survey for the first quarter of 2009 showed that 18.5 per cent. of the 254,000 people made redundant in the previous three months came from rural areas—the percentage roughly corresponds to the 19.3 per cent. of the population who live in rural areas. The agriculture industry is specifically helped by the stability of demand for its produce, compared with other sectors of the economy. New tractor registrations—not a statistic that I have cited much in my political past, but one that I shall be looking at in future—which are traditionally regarded as a bellwether of the industry's confidence, increased by more than 6 per cent. in the first four months of 2009 compared with the same period in 2008.

Jim Fitzpatrick: The hon. Lady says that water poverty is not being appropriately addressed, and I am sure that she is more familiar with the issue than I am, as she represents the south-west. I will ensure that she gets a copy of the information that the Department receives from the research that it is undertaking.
	As I was saying, this is all being kept under regular review by the National Economic Council, with reports from the Commission for Rural Communities—as mentioned by the hon. Member for South-East Cambridgeshire (Mr. Paice)—and the regional development agencies, as other hon. Members have mentioned. At the risk of being accused of being in denial, I should say that none of this says that rural areas or rural communities are immune from the effects of recession, and no one would claim that—especially me. It is easy to talk about averages, because that is what we can measure and compare, but the simple fact is that for an individual who has lost his or her job, and who fears losing a home as well, the effects are devastating.
	Much of the action that the Government have been taking is intended to prevent those job losses in the first place, to put the right conditions in place for recovery, and to help prevent homes from being lost. Nevertheless, the available indicators appear to show that rural areas are holding up well so far, and in most cases have not suffered as much as urban areas. Across the UK, there have been some encouraging signs that confidence is improving, although we remain cautious. There is no reason to be complacent and it is legitimate to ask what we are doing to tackle the recession in rural areas.

Jim Fitzpatrick: No, I would not for a second question the statistics that the hon. Gentleman cites about his constituency, any more than he would question mine. He has much greater familiarity with the area. I said earlier that the rural community was not homogenous, and that there were differences in many areas. I hope that that qualifies my comments about the rural community doing well. It was a qualified observation, as the hon. Gentleman will be able to read in due course.
	The intention, of course, is to avoid any systematic disadvantage based on geography, but in effect the measures taken by Government more generally to stimulate the economy and to get us all out of recession are just as important to rural communities and businesses as to elsewhere. Given the many similarities between rural and urban economies, we believe that that is the right approach, rather than establishing a number of separate smaller rural schemes that would only add to the costs of administration.

Jim Fitzpatrick: My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) paid me a compliment and gave me an opportunity to ask questions of the Opposition, but my hon. Friend the Member for Copeland (Mr. Reed) gives me a slap and says that we are not doing enough in terms of affordable housing. I hear what Labour Back Benchers say, and I hear the silence from the Opposition Benches. This issue is not going away, as it will continue to be pressed by many honourable colleagues.
	I said that rural communities are very much like any other, but there is one very important aspect that we cannot ignore: the extent to which they are engaged in land-based activities that remain vital for environmental protection and enhancement. DEFRA is putting £3.9 billion into the rural economy between 2007 and 2013 via the rural development programme for England. More than double the size of its predecessor, the RDPE will both help farmers and support other rural businesses. Around £550 million of the total sum will go to support small businesses, including farmers, and improve the quality of life for rural communities.
	At a regional level, the RDAs have been delivering packages of measures tailored to the needs of the individual regions. For example, Advantage West Midlands is investing an extra £3 million to help community development finance institutions and other alternative finance providers to meet additional demand from new and existing business and social enterprises. In addition, the East of England Development Agency is running a three-year campaign, offering free business IT support and advice. I am sure that the work done through Business Link East to put together an "open for business" package for rural pubs will receive the wide support of the House.
	Earlier, Opposition Members raised the question of Dairy Farmers of Britain, and asked whether the Government were doing enough to support that organisation. The appointment on 3 June of PricewaterhouseCoopers as receivers and managers of Dairy Farmers of Britain, a farmer-owned dairy co-operative with a turnover of approximately £500 million a year, was disappointing to all those interested in the dairy industry, and distressing to employees, the farmer members, dependent businesses and customers.
	A written statement, laid before the House on 9 June, set out the position. Since then, more farmer members of Dairy Farmers of Britain have found alternative buyers for their milk, and while we do not yet have firm figures, we estimate that about 90 per cent. of milk by volume of the Dairy Farmers of Britain's original farm supplies has now found a buyer. In such a short space of time, that is a tremendous achievement by the industry as a whole, and on behalf of the Department for Environment, Food and Rural Affairs I pay tribute to the hard work of the Dairy Farmers of Britain's employees, its members' council, which assisted in the process, the receiver and other dairy processors, all of whom have worked together to ensure that the impact of Dairy Farmers of Britain's financial collapse are minimised.
	The receiver stated on Friday 12 June that on their appointment 400 farmer members, from a total of about 1,800 farmer suppliers, had yet to find alternative buyers. I understand from contacts made over the weekend that the number has fallen further, and DEFRA officials will meet the receiver on 17 June to review progress.

Rob Marris: My hon. Friend has dealt with milk; may I congratulate him on honey, too? With colony collapse disorder among honey bees, the Government have rightly increased fivefold their spending on research for honey bees, which are vital pollinators in rural areas. The Government have matched that with funding from, I think, the Wellcome Trust, so the annual research budget in the next five years will go up from £200,000 a year to £2 million a year, and I congratulate the Government on that.

Jim Fitzpatrick: My apologies to the hon. Gentleman, but I am not in a position to respond to that point directly. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Wansdyke (Dan Norris), may be able to do so when winding up the debate. If he is not in a position to do so, I will certainly write to the hon. Gentleman tomorrow with the latest position regarding the plant that he mentions.
	The issue of broadband was raised. The Government are aware that in many rural areas there are significant barriers in terms of access, speed, cost and quality to broadband provision that still need to be overcome. We want to ensure that rural areas are not left behind as next-generation networks and other digital platforms develop. The European economic recovery package, agreed in March, allocated €1.02 billion to the rural development programme at EU level. The UK's share of that is approximately £12 million. Final decisions on how funding should be allocated are being taken now, and rural broadband is one of the issues being considered. In addition, Lord Stephen Carter in the other place has asked the Commission for Rural Communities to produce a report examining the impact of digital technology on rural economies, and the potential barriers.

Tim Farron: I, too, would like to express my disappointment at the absence from the debate of the Secretary of State. That reflects rather poorly, perhaps, on the Government's commitment to these issues. However, I would not want that to detract from my warm welcome to the Minister to his new job. I look forward to being able to nobble him on hill farm allowance, dairy farming and rural housing issues in the lift in Norman Shaw, to which I am sure he equally looks forward.
	I spent—profitably, I hope—much of the recent recess calling on businesses in my constituency unannounced. I am sure they were exceptionally grateful. I spoke to 400 businesses in a dozen towns and villages around my very rural constituency, and I got a range of messages. There is a mixed picture out there. Clearly, there were some good news stories and some exceptionally bad news stories, but the modal response was something like, "Things are about where they were a year ago, but we have had to work twice as hard and think twice as hard to make sure that they stayed that way."
	Thomas Jefferson was once accused by a rival of being lucky. His response to that charge was, "It's interesting. The harder I work, the luckier I get." Speaking for my communities, I would say that although the downturn is a reality, there is also a strong sense of defiance and of being determined to make their own luck. The problem remains that the rural community is nevertheless in a vulnerable position, largely because of Government failure over the past three decades to support our communities.
	That is reflected by the closure of 8,000 post offices under the Conservatives first and now under Labour, with the biggest impact falling upon the countryside; the reckless and irresponsible selling-off of the majority of rural affordable housing under the Conservatives, followed by the Labour Government's abject failure to address the crisis that that created; the loss of community, owing to the unsustainable growth in second home ownership in many villages in rural Britain; the loss of hospital services under Labour; the increased exploitation of our farmers by the supermarkets and the processors; and the way in which decisions that affect us in rural Britain appear to be taken by Labour Ministers cloistered in Whitehall, with little or no regard for the impact of those decisions on the communities that they affect.
	The Conservative motion contains nothing with which I would disagree, but it is laced with irony. I wonder who sold off all the affordable rural housing. I wonder who encouraged the unsustainable growth in second home ownership. I wonder who were the high priests of the free market fundamentalism that led to the banking collapse and the recession in the first place. Given that Members have become rather adept at contrition recently, I wonder whether anyone on the Conservative Benches might consider disarming those of us who are a tiny bit sceptical by saying sorry. There is nothing wrong with irony so long as one understands that it is irony, and as such we support the motion. We are concerned about the lack of any solutions presented within, however, and that is why we tabled an amendment in an attempt to provide some substance and to strengthen the hand of farmers and growers, who are so often forced to take poverty rates for their produce by much more powerful operators in the food market—chiefly, those on the retail side.
	Following the tragic collapse of Dairy Farmers of Britain, to which many Members have already referred, many stricken farmers have been exploited by buyers offering, in some cases, as little as 10p a litre—14p below the cost price—for their milk. Almost 1 billion litres of milk production capacity has been lost over the past three years, and it is immoral and counter-productive to treat dairy farmers in that way. A food market regulator would give farmers a champion who would intervene and ensure that they were not exploited.
	Is it not ironic also that so many people wander down one aisle in the supermarket and buy fair trade coffee, but wander down the next aisle and buy to put in that coffee milk that was taken from an exploited local dairy farmer at below cost price? Our amendment sought to ensure fair trade for farmers and growers in Colombia and Cumbria. The loss of production capacity in many areas of British farming is a clear example, as other Members have noted, of the failure of the unfettered and unfair market.
	John Maynard Keynes—

Julia Goldsworthy: Do we not also need to ensure that consumers are properly educated about what happens and are not misled? Often, they are told that they have the opportunity to, for example, buy cabbage locally, without knowing that, although it has been cut locally, it has been sent hundreds of miles away to be wrapped in plastic and then sent back to their area. People need to be fully aware of the situation's true carbon impact.

Tim Farron: I could not agree more with my hon. Friend. Honesty in presentation, packaging and labelling of food stuffs is absolutely crucial in terms of both educating people to allow them to make choices so that we do not incur excessive and unnecessary food miles, and recognising that, in this country, we have the highest environmental and animal welfare standards in the world. Those standards cost, and it is wrong that our farmers should be at a disadvantage to competitors who can sometimes claim that their produce is British, just because it is processed here, and therefore sell it at a cheaper rate.
	Returning to John Maynard Keynes, if I could, I should say that he, a great Liberal, of course, was unfashionable for many years but has now been proved comprehensively right. He once said, among many other words of wisdom, that
	"the market can remain illogical for longer than you can remain solvent."
	Those words ring painfully true for dairy farmers right now. They ring true for every rural community that has lost its post office; for every community that has seen its permanent population disappear due to the loss of social rented properties and excessive second-home ownership; and for every rural community that is isolated and cut off thanks to the deregulation of public transport and the subsequent loss of vital bus and rail links.
	In my constituency, and in many others no doubt, too, the number of people registering for jobseeker's allowance has risen significantly. It has tripled in the past year. We do not have many huge employers in our area; our eggs are in many baskets. I would say that that is a blessing, but some of those baskets have come crashing down, bringing heartache and hardship to decent local business people, their employees and their families. The impact of the recession has become tangible. Like many hon. Members, I am seeing in constituency surgeries a huge increase in the number of families in danger of defaulting on their mortgages or private rental agreements, an increase in demand for social rented housing and a rocketing in the number of families being squeezed into inadequate hostel accommodation. There is rising unemployment and the hours or wages of workers in employment are being cut; the downturn has begun to take effect.
	Two weeks ago, a young mum came to see me in my surgery. That weekend, she had to make the choice between paying her electricity bill and feeding her family. It is against that backdrop that the scandal of MPs' allowances has been played out; it has been juxtaposed with rising hardship, so no wonder there is such visceral anger out there, especially in impoverished rural communities. That economic hardship, coupled with the discrediting of the political class, is a toxic cocktail; I hardly need to remind hon. Members that such a cocktail brought Hitler to power in the 1930s. Shamefully, the same toxic cocktail led to the election of two Nazis to the European Parliament last week.
	The answer to the crisis is not to wring our hands or chuck eggs at people, but to offer real, tangible hope. To do that, we need to give rural Britain a new deal. We need to invest in our countryside and ensure sustainable communities. Let us start with housing.

Tim Farron: I am not directly familiar with the case, but I am sure that like all local authorities, Northumberland county council has to make difficult choices because of a variety of things such as the decline in return on investments and the reduction in local government funds. The hon. Gentleman will have to forgive me, however, as I do not know the detail of the issue; I promise to find out.
	If we are to try to solve the problems faced by rural communities, we have to start with housing. According to the Government's own Commission for Rural Communities, 100,000 young people are set to leave such areas in the next three years, principally because of a lack of affordable housing. There is therefore a desperate need to create homes that will enable those young people to stay and their communities to thrive. We must scrap the Government's remote, counter-productive and undemocratic regional spatial strategy and instead empower local communities to build homes with community backing.
	Michael Heseltine once referred to the planning and development policy of the 1980s as DADA—"decide, announce, defend, abandon". The regional spatial strategy is clearly a recipe for more DADA. Let us give communities the power to create the homes that they need in the places where they are needed. Why not follow in the footsteps of the Liberal Democrat-controlled South Lakeland district council, which has adopted the home on the farm initiative? That could see hundreds of unused or underused farm buildings converted into affordable homes for local families. Homes could be built in the back yards of people who actually want them there.

Tim Farron: The hon. Gentleman is absolutely right. I look at my own constituency as a microcosm. Rising prices eject people from the Lake district and dales parts of my constituency, so they move to Kendal, then that becomes unaffordable, so they move to Milnthorpe and Flookburgh, and then they become unaffordable, so they move even further away. The impact on housing and other parts of the economy is palpable and seriously damaging.
	Let us have a renewal in agriculture, too. With farm incomes under threat like never before, and with the challenge of climate change facing every one of us, we must ensure that the new deal for the countryside has an unmistakably green tinge. We could extend carbon trading to enable large corporations to offset their carbon emissions by paying our farmers for work further to extend carbon sequestration in the countryside. In the uplands, especially, that could mean that our hill farmers finally get the rewards they deserve for their role as the stewards of our environment and our landscapes.
	Let us be ambitious about fusing the environmental imperative with the fightback against recession. For example, there should be a far-reaching scheme to ensure that farmers can choose to host anaerobic digesters with Government start-up funding to enable whole communities to recycle organic waste and to create renewable energy.

Tim Farron: Indeed, "The Archers" is doing a great job in popularising that technology. However, this country is way behind in deploying it—for example, about 70 times more anaerobic digesters exist in Germany—despite the clear engagement of the farming community and their willingness to lead the way.
	On rural services, let us give a commitment that we will not see the provision of key services—especially health services—as "one size fits all". Let us acknowledge that whatever rules apply to the provision of hospital services in urban areas, there are overriding concerns in rural areas. It cannot be right for heart and stroke services at rural hospitals such as Westmorland general hospital to be removed to places such as Lancaster, leaving patients in emergency need up to an hour and a half away from their nearest acute hospital. Neither can it be right to force cancer patients in rural areas to make daily three-hour round trips for life-saving treatment. That is why we are committed to returning acute services and to creating new cancer services at our rural hospitals. That is right not only because people in rural communities deserve the same standards of health care as those in urban communities but because the development of, for example, a new £15 million cancer treatment unit at my local hospital in Kendal, and at others, would be a significant economic driver.
	Tourism is central to the economies of many rural areas. The Cumbrian tourism economy alone is worth £1.2 billion each year. This year, there are some signs, in the lakes and dales at least, that businesses in the tourism industry are faring better than expected. I suspect that the weakness of the pound and the strength of the product have helped us, but times are still challenging. Although much of tourism's revenue goes back to the Exchequer, there is little attempt by the Government to nurture that investment. Small bed and breakfast establishments are forced to abide by the same regulations and rules as huge hotel chains. They are hampered by ridiculous cut-off rules on VAT, which limit their ability to grow and take custom.
	The support for marketing of our tourism industry is dismal. We have a premier league tourism product in this country, but especially in England we have non-league levels of marketing funding. The Government must acknowledge the importance of our tourism industry if they are to help the rural economy fight its way out of recession.
	In all of that, it is essential that local communities are in control of their own destiny. As we have seen from the loss of post offices, the decline of many communities and the cuts to rural health services, there is an overwhelming sense of anger at things being done to us without our consent. We are sometimes offered consultations, but that has become a meaningless word under this Labour Government. Never have we been more consulted and less listened to. The top-down decisions to close jobcentres in rural areas, rob our rural communities of post offices, take away rural tax offices, force through the reduction in social housing stock and remove acute hospital services have all damaged our rural communities, but we were given no say in them.

Robert Walter: I am grateful to you, Mr. Deputy Speaker, for calling me early in this debate. I have some regret, however, that that is as a consequence of not a single Labour Back Bencher rising to make a substantial contribution. That is symptomatic of this Government's attitude to rural communities and the effects of the recession on them. That may be the reason why, after the European elections in the south-west of England, Labour now has no representation among the six Members of the European Parliament, and why after the elections to Dorset county council there is now not a single Labour county councillor, despite the fact that Labour still holds one parliamentary seat in the county, South Dorset—for the time being.
	Mr. Deputy Speaker, you and many other Members will be aware that I have a picturesque constituency that offers some of the best rural land in Britain. We have some of the best dairy farmers in the country, and each year the area offers visitors great hospitality. We have many small and medium-sized businesses that keep the economy afloat. Having a constituency of 350 square miles, with no large towns or cities, gives me the ability to speak about rural communities.
	The statistics show that across the country an average of 10 per cent. of non-agricultural employees are in manufacturing, but in my constituency that figure is 17.5 per cent. according to the latest business inquiry. In fact, this morning I visited one manufacturing business there. It is an international company, and I suspect that during the day virtually all Members have sat on one of its products. It makes the springs that go in the seats of most cars manufactured in Europe, among a number of other spring-like products. The company is called William Hughes and it is in Stallbridge, a small town in my constituency.
	Later this week I will be visiting another business in my constituency, a big international business that is one of the FTSE 100 companies. It is Cobham plc, which will be exhibiting at the Paris air show. It makes the fuel systems and antennae that go on most aircraft produced in the world, whether by Airbus, Boeing or a number of other manufacturers. There are a multitude of other businesses in my constituency, including a leading paint maker, a company that makes probably the majority of trolleys and cabinets found in hospitals and health centres across the country and many companies that are involved in food manufacturing.
	However, my constituency is not the industrial heartland of Britain, or one of the great metropolitan areas, as the Government see it. It is a local economy that is under unbearable strain. It is squeezed by the recession and unsupported through Government action.
	I want to discuss three main subjects: unemployment as it affects my constituency and the impact on it of the closure of jobcentres; the closure of post offices and its detrimental effect, along with the absence of broadband in many areas of my constituency, when people need access to services, and the closure of rural businesses, particularly rural pubs.
	I shall start with unemployment. In my constituency, the number of jobseeker's allowance claimants is up a staggering 187 per cent. in the past 12 months. Even from a low base, that is some increase. Men in North Dorset are the hardest hit, with an increase in unemployment of 211 per cent. in the past 12 months. In the first few months of this year, that figure is up some 60 per cent.
	There is also a worrying trend towards people claiming for longer. In April last year, only 25 people in my constituency had been claiming jobseeker's allowance for between six and 12 months. The figure is now 120 and growing. Compared with many constituencies, it will appear small, but the rapid increase worries me. I am also worried about those who will go into the 12 months or longer category, without access to appropriate training for the skills that today's job market demands. We all know that those who reach that 12-month threshold without appropriate intervention risk staying economically inactive for much longer. There is therefore a huge increase in men claiming jobseeker's allowance and in people generally claiming jobseeker's allowance for a long time.
	Another trend worries me, and that is that the number of young adults forced into unemployment has increased by 222 per cent. I make no apology for using statistics—indeed, the Minister used them in his opening remarks.

Christopher Fraser: I apologise for not being in the Chamber at the beginning of the debate, but I was chairing a Statutory Instrument Committee. Fortunately, however, I arrived to hear my hon. Friend the Member for Arundel and South Downs (Nick Herbert) speak eloquently about the problems faced by rural communities.
	It is a great pleasure to follow my hon. Friend the Member for North Dorset (Mr. Walter), who articulated the problems of large rural constituencies extremely well. I have the same problem in my constituency, which, for the record, is approximately 1,200 square miles. It contains 47 villages and five towns, with quite a disparate community spread out between Thetford forest and the fenlands. As such, those who live in my constituency feel that the Government's one-size-fits-all urban agenda of the past few years is just not for them. They feel that they are not listened to. However, also for the record, the results of the local elections in Norfolk last week spoke volumes about how people feel that the Conservative party in Norfolk represents and can articulate their point of view. It is a great pity that the Government have not woken up to the challenges that Norfolk faces in the current climate.
	The number of JSA claimants in my constituency has increased by 92 per cent. in the Breckland area and by 82 per cent. in the King's Lynn and west Norfolk area. They are shocking figures. We have cited various figures this evening and asked the Government to look into what is happening. However, the truth is that the evidence shows not just that local people are disheartened, but that they are losing their jobs and cannot cope. The demand in rural areas for financial services such as debt advice far outstrips supply. For someone who has lost their job and cannot cope, that is a profound thing to deal with. In a large rural area, it is difficult for someone to access the services that they might get in an urban area. The Government need to consider that very carefully. I have had dealings with the Minister over the years, and he is a reasonable man, but does he accept that that combination is particularly worrying for people living in constituencies such as mine?
	For many people in South-West Norfolk who have lost their jobs or whose jobs are under threat, the internet, which colleagues have already spoken about this evening, is a vital tool for accessing banking and financial services. However, in some rural areas broadband access is still well behind that in other parts of the country—I stick my hand up and say that Norfolk is no exception. I ask the Government: what is being done to ensure that the countryside has adequate access to broadband? I am not sure that the assistance the Minister spoke about earlier is enough, either in how it is applied or how much money is being put in, to alleviate the problems in constituencies such as mine. I ask him to look at that carefully, and I would be very grateful if he came back to me about the issue in my constituency.
	It is vital that those living in rural areas should feel able to live and work in an area that is equal to other areas in terms of help and access to services. For too long, Norfolk has played second fiddle to other parts of the country. For too long, constituents of mine have felt like second-class citizens. That is a great shame. For too long, Norfolk, and in particular Thetford in my constituency, has been seen by many people in the House as a problem, rather than as the opportunity that it is and always will be, because of the people of Norfolk's dedication and their desire to get on, make a contribution and live in vibrant communities in the areas where they work. That desire has always been there and it always will be there, but the area needs a lot of help from the Government.
	The current imbalance has not gone unnoticed by the Commission for Rural Communities. A recent CRC report states:
	"Some rural local authorities and Job Centre Plus offices are struggling to...support their unemployed because of distances to training and support centres and the lower numbers involved."
	Does the Minister agree that those in rural areas are suffering particularly as a result of the economic crisis, and because we have an extremely poor public transport system? The problem is acute in South-West Norfolk. Bus operators have to try to work across a large, disparate county, and a lot of people obviously encounter long distances between villages and towns. When someone is on a fixed income or has no income, things are made even more difficult when they have to go so much further than their cousins, brothers, sisters or other family members who live elsewhere.
	We have also seen the closure of local jobcentres. How can closing the focal point for retraining and getting back into the work force help rural communities to survive? I am afraid that that speaks volumes about the Government's attitude towards constituents such as mine. We also have deprivation in Norfolk—social, economic and geographical. We have vast amounts of fenland, which needs not only to be policed but looked after in terms of the Government's commitment. What advice would the Minister give to people in the 1,200 square miles that I represent? It is terribly important for me that I be able to return with a positive message, which I hope my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) can give me from the Opposition Front Bench, even if the Government cannot.
	I have received many letters from constituents who have lost their jobs and are desperate to retrain. However, they are prevented from taking up full-time courses for up to 18 months. Therefore, they live in communities that do not have services, in areas that do not have adequate public transport systems. They want desperately to get out there and get a job, but every time they take one step forward, they take two steps back. That is killing our communities and killing a lot of people's will to get back into the work force, which we desperately need them to do if enterprise and initiative are again to be the backbone of our economic success. Does the Minister accept that many people in rural areas who have lost their jobs and who want to reskill are penalised twofold, owing to Government-imposed restrictions and the long distances to training centres, coupled with poor public transport?
	I want to talk briefly about small businesses, which are an enormously important source of employment in our communities. I have already mentioned Thetford, where small businesses have been hit particularly hard. We have a first-class manufacturing base and a need for apprenticeships. We also have a need for investment in Thetford. We have growth point status, so we are getting the houses, but we need the infrastructure that goes with them and—dare I say it?—the roads infrastructure. Let us not forget that Norfolk is the only county in England without a dual carriageway linking it to a national trunk road network. Although there have been good indications from various Ministers that such a scheme will be unlocked, Norfolk has for too long been unable to play its true part in the economic success of our nation. Every time we go forward, another barrier is put in the way to prevent us from making the contribution that most, if not all, of my constituents desperately want to make, for their own well-being and for that of the nation.
	We have high transport costs and—dare I say it?—high energy costs. The price of fuel in rural areas is disproportionate, because vehicle use in those areas is a necessity, not a luxury. People, such as pensioners, on fixed incomes and farmers are unable to cope. I regret to say that the Government have adopted a one-size-fits-all urban agenda, and it just does not work. In Norfolk, that agenda also applies to local government reorganisation. To suggest that what someone in the middle of Norwich needs is the same as what people in the fenlands need is a complete insult to the people in my constituency. Their aspirations might be the same, but their needs are different and they need to be treated with individual care and respect. They also need to know that someone is going to look out for them, and if this Government will not do so, the next one will.

Christopher Fraser: I do not want to get diverted on to by-election issues, but I will say that it is no coincidence that the accounts of Norwich city council have not been written and agreed for many years, because of the way in which they have been put together. In my constituency, where we have two Conservative councils, we have proved, year in, year out that Conservative councils in Norfolk deliver for the people because they listen to the people and develop services for the people. It will be interesting to see how the people of Norwich take up that issue in the coming weeks leading up to the by-election.
	I now have more companies writing to me to say that they cannot get business loans than to say, "Thank you very much indeed. The bank has come to my rescue and I have got my loan." That is just not happening, and companies are going under. They are good third and fourth generation owner-managed companies that have invested in their business and spent every moment of every day trying to build up the well-being of their work force and produce products that are in many cases world-beating. They are run by dedicated people who are not profligate and who do not drive big cars or go on swanky holidays.
	Those people work every day of the year for the well-being of their organisation and the people they employ, but the banks are not helping them. They are pulling the rug from beneath them, and it is quite sickening to hear that bank profits are at their present levels. The fact that they are also paying such large bonuses against the will of the Government and of the people is quite extraordinary. It saddens me to think that the Government are not confronting this issue and dealing with it head on. Small businesses and enterprises in constituencies such as mine are desperate for a hand up, not a handout. This is not a question of the state coming to the rescue.
	I will pass on to the Minister some of the stories of the people in my constituency, because they are doing more than their best, but they are not being paid. They are trying to re-mortgage their houses in order to put money into their businesses, but the mortgage companies are not interested. Those people are in a Catch-22 situation. They take one step forward—and then have to take two steps back. That will not get us out of the recession or help those people in the future. It is a very sad day when I have to say these things, but they are true. This saddens me and all my colleagues. I would much prefer to fly the flag for our local businesses and tell the House how good things are for them, but I am afraid that that is not the case.
	At a time when we are looking to small businesses to lead us out of the recession, what impact does the Minister expect the Government's decision to end transitional relief to have on firms in rural areas? That is a simple question. As I said earlier, I am very fond of the Minister, but I am not so sure that either he or the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Wansdyke (Dan Norris) will be able to answer it. I do not believe that the Government have a coherent plan for the rural economy. I come back to the point that my hon. Friend the Member for Rochford and Southend, East (James Duddridge) has just made about Norwich. It has been proved time and again that the Government do not need votes in rural areas to win elections. In my opinion, however, that should not influence the way in which they govern the country. I hope that the electorate will remind themselves of that point, come the general election.
	Many rural constituencies, including my own, have suffered jobcentre and post office closures. We have had a disproportionate amount of post office closures in my constituency, which is very sad. One or two of my constituents have taken it upon themselves to restart their post offices with the support of the community, but it has been extremely difficult. As my hon. Friend the Member for North Dorset said, the post offices should become one-stop shops and the beacon of the local community, so that the local community can survive.
	My grandmother, who died just after Christmas at the age of 99, lived in my constituency. She would not have found it easy to go online to get her pension. That is an absolute, straightforward fact. She was a lovely woman, but she could not manage technology. So, when the local post office could not help her, what was she to do? That example from my own family is being echoed across the country, and it is a crying shame that, while post office closures are happening, the Government are sitting on their hands and saying, "It will work. It can work." That is okay for people who are aged 18 to 21 or from 25 to 30, but when people who are over 30 start wearing glasses and finding the digits difficult, these things are not so easy. People in that older age group just cannot manage, and retired people on fixed incomes are being disproportionately penalised.
	How does the Minister respond to my constituents who believe that, for the past decade, this Government have presided over the erosion of rural services, the true effects of which are now being felt as a result of the recession? The recession has hit them in the face. The Commission for Rural Communities has called on the Government to expand the financial services offered by the post office network, so that rural communities do not sink into financial exclusion, but I cannot see much action being taken by the Government to deal with that issue. The Conservative party has been calling for that action for some time. As I would say anyway: bring on the election, so that we can test the arguments with the electorate and allow a Conservative Government to come in and stand up for the rural economy in a way that this Government have not done. I am sure that the Minister will agree that, at times like these, post offices are a vital resource for people living in rural areas. Does he now see that the closure programme was woefully misguided?
	One of the groups being hardest hit is pensioners. A significant proportion of my electorate are pensioners, and they are struggling because of very high fuel costs, for example. At least 50 per cent. of those living in my constituency have no access to the gas network and must therefore rely on heating oil, which is expensive. Every time I have spoken to a Minister, written to a Minister or put a question to a Minister across the Chamber to point out that those people have no alternative, I have been told, "It's okay. We have a plan in place for people to have underground heating." The Government have all these new-fangled ideas for supplying something that people just cannot get. If there is no possibility of getting a mains gas service to a house in the first place, and if people live in a terraced house in the middle of nowhere with a postage-stamp back garden, for example, it will be impossible to lay half a mile of cabling to get them an alternative energy source.

Christopher Fraser: I am enormously grateful to my hon. Friend, who makes a valid point. On occasions, there is more gas in this place than we in Norfolk are able to secure! Households face a double blow: they face higher household costs, while having no proper infrastructure for services. The local community is sometimes literally dying on its feet: young people cannot get jobs and business people cannot secure the loans they need, so people are moving away. It is a crying shame for a proud county such as Norfolk—proud in what it does and proud in what it wants to do—to be hampered in every which way it tries to move forward. The Government should look further into the problem.

David Taylor: The hon. Gentleman will have been a student of post-war politics, so he will know that about 25 years ago, the supply of gas was privatised into a commercial market. Is he now regretting that development, as a result of which companies take commercial decisions to deny or to supply only at great cost to those communities with relatively small numbers of consumers? Is that not how the market works, or have I missed something?

Christopher Fraser: I am not taking another intervention from the hon. Gentleman, but I will allow him to write to me, as I first suggested.  [Interruption.] No, he has had his chance; I am not giving way to him again.
	Finally, I want to deal with the effect of rural crime. My constituency suffers from many farm thefts. There are opportunists coming into the area from far and wide, who think that they can easily take something from a farmyard in a rural area because they will not be detected. They think that no one will catch up with them, but why? As a large, disparate county, we have a first-class police force that is centred mostly around urban centres and does not have the capacity to get into rural areas as quickly and effectively as it would wish.
	There have been many Government schemes to bring in what I would describe as alternative police officers. That is fine; I am very pleased that some towns in my constituency have benefited from such people doing their job. When it comes to crimes in rural areas, farms are already suffering because, for reasons I have already explained, they cannot manage within their budgets. When someone steals all their oil or takes a truck or other machinery, it has a disproportionately negative effect on what can be done.
	This Government must understand and accept that policing requirements are quite different in rural areas from those in the centre of Norwich. On a Saturday night in the city centre, people duff each other up because they are drunk; the police can come to the rescue because they are only three or four minutes away. If someone calls a police officer to come to a farm in the middle of the fens on a Saturday night when there is an event going on in Norwich, it is awful to say it, but the police may not get there for some time.
	I see that the Minister has probably just been handed some information about rural crime in my constituency. Yes, relatively speaking, it is low; but if something has been stolen from people or their property has been violated, statistics matter not. What matters is effectiveness and how long it takes to get the problem dealt with. Time after time I hear stories about what happens. If it is not as bad in Norfolk as in other parts of the country, I am awfully sorry but that does not matter for a victim of crime. What matters is the attention people are given and how their problem is dealt with. The police in Norfolk do a brilliant job in difficult circumstances, but this recession has made the position even more profound.
	I leave this issue with the Minister. Will he give due consideration to all the points raised by my colleagues—dare I say it, by Opposition Members, not Government Members?—this evening? At this 11th hour of a Labour Administration, will he seriously consider making a gesture towards the rural economy in the light of the recession it is facing across the country? Will he deal with the problems of the recession in rural areas, in the same way that the Government have done through all sorts of initiatives in areas where seats may be marginal and they think it might make a difference? If the Government can help, I can tell the Minister that although people may not vote Labour, they will once and for all appreciate that their voice has been listened to in this Chamber—and for that I would be most grateful.

Edward Timpson: I wish to make a short contribution to today's timely and welcome debate. In doing so, I am wearing two hats. I wear my first hat as the MP representing Stapeley, where the farmers' milk co-operative Dairy Farmers of Britain is based; sadly, the company went into receivership on 3 June this year. I wear my second hat as the secretary of the all-party parliamentary group on dairy farmers, who make up a sector of British agriculture that is very important not only to my constituency and the rural areas of Cheshire, but to the United Kingdom as a whole.
	Let me deal first with Dairy Farmers of Britain. I thank the Minister for the update he gave us earlier about the circumstances in which the company finds itself. It is one of the dairy flagships of Crewe and Nantwich and it deserves as much support as possible, and I shall explain what exactly needs to happen in that regard. The fact that it has hit upon such hard times has sent shockwaves through my constituency's agricultural community and provides no relief to the people working there. We must remember that the community affected is made up of not just farmers, but non-agricultural staff as well.
	You may be aware, Mr. Deputy Speaker, that the agricultural community in Cheshire and across the whole of the UK relies heavily on the dairy industry to remain healthy through very difficult times. The DFOB's Stapeley headquarters employs some 40 permanent staff, plus field-based staff outside the Stapeley offices. These staff have no representative body to speak of, and a number of them have contacted me personally to express their concerns about how long they are going to hold on to their jobs and how much information they are going to receive through the process. I hope that the Minister will take that into account when he goes back to the Secretary of State and explains the position of my constituents who are suffering as a result of the current recession.
	On the basis of discussions from my office, the receivers, PricewaterhouseCoopers, seem to be following correctly laid down procedures, but that does not necessarily help those going home on Friday who do not know whether they will still have a job to come back to on Monday, particularly when they have seen the DFOB dairies at Bridgend and Blaydon simply closed, rather than sold on as an alternative. We hope that the position will be looked at further, but that is the current state of affairs and it is extremely worrying.

Edward Timpson: I am grateful to my hon. Friend for raising that point. It is true that farmers who were part of a co-operative and invested in it lost their May payments for the supply of milk that they provided, and there is also concern about their future investment. Fortunately for many farmers in the Crewe and Nantwich area, they had managed to opt out of the co-operative before the state of affairs had worsened to the extent of receivership, but nevertheless many farmers who rely on a certain level of cash to keep themselves going now find themselves with a great black hole in their finances and very little support to see them through the crisis. Some of what we have heard from the Government today is welcome, but it is still a case of shifting sands. We need more concrete answers to give farmers who find themselves in such difficulty.
	If I had one word of advice for the official receivers, it would be to liaise with Members whose constituencies contain affected sites and to keep them abreast of the position so that they can support their constituents as much as possible as and when such support is required.
	Let me say something about the members and ex-members of the co-operative. As I have said, in Crewe and Nantwich many left when they saw that the writing was on the wall, and they did that in order to maintain a regular income from their milk. However, their investment in the co-operative has not been returned, and they are listed simply as unsecured creditors under the Insolvency Act 1986. I ask the Minister to look at the position as a matter of urgency. We understand that talks will resume on Wednesday in an attempt to find a solution. I believe that assistance may be available from organisations such as the Royal Agricultural Benevolent Institution, but it will be no substitute for the tens of thousands of pounds invested by farmers in DFOB. To many of them, that money represents their pension pots. My hon. Friend the Member for South-West Norfolk (Christopher Fraser) raised the issue of pensioners earlier.
	I welcome the update from the Minister. I too have liaised with the receivers this week, and I shall be meeting the president of the National Farmers Union. I am also grateful to the Secretary of State, who, although he did not have time to come to the Chamber today, has found time to meet me on Wednesday to discuss the future of DFOB.
	What am I asking for on behalf of DFOB and all who have been affected by its current crisis? I simply ask the Government to take a considered and detailed view of how they can best help non-agricultural staff and farmers in my constituency, and the others who have been mentioned. What financial assistance can the Government provide to alleviate the anguish caused by lost investments and pensions? What assistance can the Minister provide through Jobcentre Plus for those who lose their non-agricultural jobs at such short notice? Can he ask his Cabinet colleague in the Department for Work and Pensions to ensure that these hard-working people are assessed immediately for entitlements and retraining when that is required?
	As my hon. Friend the Member for South-East Cambridgeshire (Mr. Paice) will know all too well, having kindly visited and spoken to dairy farmers in my constituency twice in the past 12 months, between 2001 and 2006 48 dairy farms closed in the Crewe and Nantwich area. According to the Royal Association of British Dairy Farmers, whose representatives I met last week, the number of dairy farmers in England and Wales fell from 28,000 in 1995 to 11,700 this year. That is a drastic fall. More recently, despite the uplift in milk prices in 2008, the average cost of production has reached 26.93p per litre, while the average price is 24.37p. Those figures speak for themselves. We can see how desperate the situation is for dairy farmers and the industry, and why the Government should act as soon as possible.
	That leads me to my final, and brief, point about the need to support British agriculture and—unsurprisingly—the need to support the British dairy industry. I asked what three things a local farmer would say to Parliament if given the chance. The answer was "Give us a fair price, assist us with nitrate vulnerable zones by not gold-plating the legislation, and cull the badgers. I'm surprised I haven't seen more suicides." DEFRA knows those issues, and knows them well. It is time for DEFRA to act.

Peter Atkinson: First, may I congratulate the Minister of State on his appointment to his new job? We have over the years come across each other from time to time in this House, and normally our encounters have been good-humoured, and I hope that continues. His predecessor the right hon. Member for Liverpool, Wavertree (Jane Kennedy) has just left the Chamber, but I want to thank her as well. She managed finally to solve one of the most complex problems arising from the single farm payment. Almost the last thing that she did was sign off that problem and as a result a farmer in my constituency has been promised the money under the single farm payment. I suspect that the right hon. Lady will get into trouble from Europe as a consequence, but I would like to place on record my gratitude to her for doing that.
	I am also grateful for the update on Dairy Farmers of Britain. The processing plant in Blaydon has closed, leaving a considerable problem for the few remaining dairy farmers in the north-east of England. Most of them have now found contracts, but there is a long-term problem: because the processing plants for milk are now so distant from the north-east, longer transportation distances of milk will lead to higher costs, which will increasingly affect the viability of the few remaining dairy farmers in that region.
	That brings me to the problem of the beef industry as a whole. I appreciate that we will have a debate on agriculture on Thursday, but the recession has touched this industry as much as any other, and, of course, a recession in the dairy industry also affects the amount of beef that is available for consumption. That will mean that our degree of self-sufficiency in beef will decline even further than it already has—from more than 100 per cent. in 1997 to only 80 per cent. currently. We have to import the rest, often from countries whose welfare standards are far less reliable than those of the United Kingdom.
	I wish also to pick up on a point that my hon. Friend the Member for Arundel and South Downs (Nick Herbert) made in his opening speech. The most important lesson to come out of this debate is that we must devolve power as far as possible. It is very difficult to pin down exactly what a rural community is. A rural community in my Northumberland constituency is very different from one in Suffolk or Surrey, or one in Sussex, where my hon. Friend's constituency is. Each has its own set of problems, and each requires individual attention and local determination in order to solve them.
	The housing issue provides an example of that. In rural Surrey, huge housing demand is what causes real problems, but in parts of Northumberland, particularly those rural areas which were formerly coalfield areas, local people want more properties to be built, because that makes their communities more sustainable. Such communities have declined because the coal industry left the area, and new houses and people, often coming from the towns, bring life back to them. We therefore want more properties in those areas, yet we live under the dread hand of the regional spatial strategy, which imposes things from above. For instance, in the part of Northumberland that I represent, we can build only 157 new houses over the next five years, which is ridiculous. According to the spatial strategy, we should all move into the city of Newcastle, and not live in the rural communities, which is what we want. The main lesson, therefore, is that we should devolve decision making to its lowest possible level, and deregulate and decentralise. That is how rural communities will be able to fight the recession.

James Paice: May I start by properly welcoming both new Ministers to the Department? The hon. Member for Poplar and Canning Town (Jim Fitzpatrick) has a hard act to follow. The right hon. Member for Liverpool, Wavertree (Jane Kennedy) was in the Chamber a few minutes ago but, sadly, she has left her place. I wanted to commend her because despite the fact that, like the new Minister, she came into the Department with a self-confessed complete lack of knowledge of the issues she was facing, she applied herself willingly to a steep learning curve and in a short space of time persuaded the farming industry and the rest of the rural community that she was very much aware of their issues and very much on their side. Nevertheless, I wish the new Ministers well in their posts.
	In his response to my hon. Friend the Member for Arundel and South Downs (Nick Herbert), the Minister made a great deal of the rural development programme for England. I must say, as an aside, that his words rang truer when he moved off his script and said what he really felt, rather than what he had been told to say. When he has had a chance to travel the length and breadth of England—it is not his fault that he has not yet had the chance to do so—to talk to farmers and to rural communities, he will not find much support for the way in which the regional development agencies have operated in the rural sphere. They have contributed far more sums of more than £1 million than smaller sums of £100,000 or less, which would be much more relevant to small businesses wishing to improve their productivity, to diversify and so on.
	Everywhere I am told about this, I find that the schemes devised—they are all different—by each RDA are bureaucratic and very difficult to access. At last week's cereals event—I went the day after the Minister—I went to the RDA stand, where an official told me, with some apology, about a farmer who had just been in wanting to see whether he could apply for a grant of about £40,000 for a meat-cutting plant, only to be told that he was not eligible. That had nothing to do with the rights and wrongs of the scheme. I have no idea whether it was a good or bad scheme, but he was told that there was no scheme that suited his needs—that is laughable, because that is precisely what the rural development programme for England was designed to produce. I hope that when the Minister has had the opportunity that I mentioned, he will look again at the way in which that programme is working.
	The Minister also trotted out a litany of statistics. I intervened on him on the issue of poverty, which is a huge issue in rural areas, not least because it is less obvious there than in big urban areas, where often whole blocks of flats or areas of communities all live in poverty. In rural areas, because of the lower population density, one often finds only one or two people living in poverty and they may live next door to someone who is clearly quite affluent, so this is a much more hidden form of poverty, but it is there. I hope that the Minister who winds up will address poverty issues and the spending plans of the Department for Environment, Food and Rural Affairs. I was astonished to find that last year DEFRA actually cut spending on "strong rural communities" by 35 per cent. The Government have also failed to mention the real-terms cut in DEFRA's budget. It has been cut by £200 million since last autumn's pre-Budget report, yet they have the nerve to criticise our proposals in their amendment to our motion.
	A number of hon. Members rightly referred to the catastrophe of the demise of Dairy Farmers of Britain, in particular my hon. Friend the Member for Crewe and Nantwich (Mr. Timpson), in whose constituency it is based. Of course I welcome the measures being taken by the receivers and by other milk buyers, and I am pleased that DEFRA officials have been involved in negotiations to try to find other buyers. However, it is very important that the banks, and indeed the merchant trade, take a generous approach to those farmers who have lost a month's milk cheque. Very few businesses in any sector of life could withstand losing one twelfth of their income unexpectedly, just like that, with no time in which to plan. If the Government had introduced the national loan guarantee scheme proposed by my Conservative colleagues, there would be some opportunity to assist. I am anxious to ensure that some of the smaller and more remote producers find outlets for their milk, because they are the ones who will find it hardest to survive.
	I hope that Ministers will also agree that what has gone wrong at DFOB—its previous and present management both have many questions to answer—does not relate to the fact that it is, or was, a co-operative. I was pleased that in the same week, Milk Link, another co-operative, reported increased profits—that is good news. What happened at DFOB was about business management and control, rather than simply about the fact that it was a co-operative, although I have no doubt that there will be those who will try to paint this as an inevitable problem that one gets with co-operatives.
	Some hon. Members mentioned a number of other agricultural issues, but I shall resist the temptation to launch into those, because we can do so at great length during Thursday's debate. In passing, I should point out that the hon. Member for Westmorland and Lonsdale (Tim Farron) trotted out almost everything he could think of on this subject—that may or may not mean that the House is relieved of the task of listening to him again on Thursday.
	This evening, we have heard a wealth of experience from a number of hon. Members—sadly, it has come only from those on the Conservative Benches—who have spoken about the importance of the rural economy. They have spoken of its huge breadth, covering not only farming and the food industry, but manufacturing—traditional craft manufacturing right through to high-tech manufacturing—a lot of research, small businesses, telecommunications and so on.
	A number of my Conservative colleagues have discussed specific issues. My hon. Friend the Member for North Dorset (Mr. Walter) referred to the Government's failure to understand the scale of issues in rural areas. It would be completely wrong to suggest that losing one's job is not a crisis for any individual, but, as he said, whereas it is bad news when half a dozen jobs go when a business closes in a large urban area, when a business loses the same amount of jobs in rural area that can be a complete catastrophe for the village in which it happens. It can wipe out the employment prospects for a large proportion of the people in the area.
	My hon. Friend also raised issues relating to the village pub—and not only alcohol duty, on which we have our own proposals. Like my hon. Friend the Member for South-West Norfolk (Christopher Fraser) and others, he rightly referred to other issues relating to business rates. I know that a debate is taking place later on that matter, but I wish to mention something that, unusually, I had raised in my constituency. As a result of the recent rate revaluation, the business rates of someone from a village pub had rocketed up by £4,000—that is a lot of money for a small village pub. He could not understand the situation until we looked into it. He had been on a transitional process since the previous revaluation. The trouble is that the Government had designed a transitional process that did not get him to where he should have been at the previous revaluation, so he lost out there and then had to go to the new revaluation, which meant a substantial percentage increase in his rates.
	My hon. Friend the Member for South-West Norfolk also referred to the reality on the ground of businesses trying to get loans to see them through the current crisis. He motioned rural crime, but he did not mention—so I shall do so now—that violent crime has increased by some 20 per cent. in rural areas since the recession set in. A number of hon. Members have referred to housing, as my hon. Friend the Member for Arundel and South Downs did in his opening remarks. Even Labour Members have said, in interventions, that a figure of only 10,000 planned homes in rural areas is wholly inadequate. I stress the need to address what has gone wrong. It is not, despite what the hon. Member for Westmorland and Lonsdale suggested, all the fault of the Conservative Governments who sold all the council houses. The problem was that the money raised stopped being recycled. Part of the big advantage of selling council houses was that that money would be recycled to build new social housing in those areas. It was the present Government who stopped that and confiscated the money to give to other local authorities.
	We need to get rid of the ridiculous top-down planning strategy—we will abolish the regional spatial strategies—and give power to local communities to decide what low-cost housing they need and where to put it. We will also use the exception site policy, introduced by the Government of which I was proud to be a member—

James Paice: The 1980s are a subject for another day, but I assure the hon. Gentleman that I probably have a much better recollection of them than he has, as I presume he was doing his GCSEs at the time.
	The point is that if local decision making is given to local communities, they will be much more amenable to allowing houses to be built in their communities, instead of having them imposed from the top down and being told that they must have a lot of extra houses.
	Rural transport has also been mentioned several times. The Minister waxed lyrical about how much money the Government have poured into bus services, but let me quote from the Commission for Integrated Transport—the Government's own body. It says:
	"Rural bus provision has declined steadily over the past twenty years as bus operators focus on more lucrative urban markets. Combined with this has been a move away from local service provision—the closure of post offices, shops and garages in particular—resulting in poor access to many facilities".
	That underlines the Government's failure to understand the importance of access to services. It is often very difficult for people in a rural community to gain access to services. The bus service is at best sporadic, and is completely absent in many areas. When schools, post offices, pubs, village shops, police stations and dispensaries in GPs' surgeries close—as many have in recent years—it not only disfranchises the community, but makes it much harder to recover from any pressures put on it.
	My hon. Friends the Members for Ludlow (Mr. Dunne) and for Hexham (Mr. Atkinson) also made pertinent points, especially on the issue of empty properties rate relief, which has hit a huge number of rural businesses and farms that have invested in property—as the Government and all politicians encouraged them to do to benefit the local economy—and have, with difficulty, persuaded the planners to agree, only to find that they cannot let that property because of the recession and are stuck having to pay rates on them. I am sure that the Government did not intend the measure to hit such businesses, but that is the law of unintended consequences.
	There is no list of figures or litany of all the things that the Government have done that will persuade people who live in rural communities that all is well there. People who live in those areas and understand the realities cannot be convinced by listening to a Minister trotting them out. I would have hoped that the Minister would not have followed the practice of the Prime Minister, who seems to respond to any challenge by trotting out another litany of statistics, but the fact is that the Conservatives—as displayed in the debate and in our motion—know that there are real examples of difficulty. We have real knowledge of the problems of rural areas. I am proud to have been born and brought up—and now to represent—a rural area. That is my history and I am passionately proud of it. We have not had a single speech from a Government Back Bencher in support of their amendment, and there can be no better testament to the veracity of our motion, which I commend to the House.

Dan Norris: I thank the hon. Gentleman for that helpful intervention. It is up to hon. Members to decide whether they want to contribute to the debate and, having heard some of the contributions from the Conservatives, I can see why my hon. Friends might have been dumbfounded and stuck in their seats. I will leave it at that.
	The hon. Member for Hexham (Mr. Atkinson) asked about milk supplies, especially with regard to the problems with Dairy Farmers of Britain. That is a serious problem, and the Government are greatly concerned about it, especially its impact in the north-east—the area that the hon. Gentleman represents. I do not think I can add much more to what my hon. Friend the Minister of State has said, but I hope that the hon. Gentleman will be reassured that the Government are taking this seriously. I will be involved in a series of meetings in the coming days and weeks to look specifically at the issues that have been raised. It is difficult to provide any further information at this point, because the situation is very fluid. It is hard to comment now other than to say that it is a tough challenge, but the Government will rise to it and find a way forward. I agree with those hon. Members who say that it is not because the organisation is a co-operative, but because of other factors.
	The hon. Member for Westmorland and Lonsdale (Tim Farron) raised concerns about milk prices, which my colleagues and I share. The hon. Gentleman might be interested to know what my officials have been able to tell me so far. The Competition Commission is now consulting publicly on draft undertakings to establish an ombudsman to arbitrate in disputes between retailers and suppliers, and to investigate complaints under the new grocery supply code of practice. The deadline for those responses was 28 May. If retailers do not sign up to the undertakings, the Competition Commission will recommend to the Department for Business, Innovation and Skills that it take steps to establish the ombudsman instead. In that eventuality, DEFRA will be one of a number of Departments invited to comment. I hope that the hon. Gentleman will be pleased to hear that. Obviously, the Government would like any assessment to be based primarily on what would be in consumers' best interest—we must never forget that they are the important individuals in this matter—but we cannot comment until the issues have formally come back to Government. I cannot risk prejudicing the consultation, but I thank the hon. Gentleman for his contribution.
	The hon. Member for South-West Norfolk (Christopher Fraser) made some interesting points, and I invite him to come and see me to talk a little more about them. I certainly share some of his concerns, not least those to do with his having a very large constituency. I think he said that his constituency covered 1,200 square miles, which is very large. That is four times the size of my constituency, which is considered large in my area. I hope that he will come and see me to talk a bit further about that.
	The hon. Gentleman also mentioned Jobcentre Plus, and a modernised service is needed to reach those who cannot get across such large geographic areas. Although I appreciate that it is sometimes difficult for older people, in particular—I was moved to hear about his grandmother's situation—the truth is that telephones are often very helpful in rural communities in making first contact and in responding to the difficulties that are raised. I hope he will appreciate that, in the end, geography is a huge challenge and we cannot always cover or compensate for that difficulty. With an intelligent application of technology, we can perhaps make a significant difference, and I hope that we can talk about that when he comes to see me.
	The hon. Member for Falmouth and Camborne (Julia Goldsworthy)—who I saw in her seat a moment ago, but who has now left the Chamber—raised some important issues about the difficulty of accessing NHS provision in her constituency. Obviously, I share those concerns, but although the NHS is a national system its services are delivered locally. Each primary care trust has to work out carefully what is needed to meet local need. I hope that she will make a point of coming to see me, too, to discuss her local concerns. I invite all right hon. and hon. Members to do the same if they have concerns about NHS delivery in their constituencies.
	I want to move on, if I may, to talk about some of the general points that were raised in today's debate. I think my hon. Friend the Minister of State was right, in his opening remarks, to point out the difficulties with average statistics. They sometimes hide significant needs. I know that from my constituency. Wansdyke had the lowest unemployment level in the UK about five years ago, yet I know that behind that prosperous headline lie real deprivation and poverty, albeit in small pockets. That is a genuinely despicable situation that one would not knowingly want or choose. I hope that people understand—as I hope I do, given that I represent a semi-rural seat—that poverty, wherever it exists, is clearly a bad and difficult thing but, in some ways, rural poverty brings additional burdens because of the isolation that people also experience. Help and assistance are not always easily available as people do not have the support of neighbours or friends that they might get in an urban area.
	The important thing to stress is that wherever people live—in rural or urban communities—the problems that they face are pretty similar, despite the unique circumstances that arise in some rural communities. Most people want improved education, a better health service, affordable homes to buy and rent and a range of other important things, not least low crime figures. Although rural areas have many challenges, I do not accept that they are notably different from the rest of our society.
	I want to touch on some of the key points that came up in today's debate. The first is broadband. The Government are acutely aware of the vital importance of good communications for individuals and small businesses in rural areas. After all, a greater proportion of home workers can be found in rural areas than anywhere else. That is why in the Budget we committed ourselves to a universal broadband standard of 2 MB a second, wherever reasonably possible and wherever anyone lives, by 2012. More details will be given in the "Digital Britain" report, which is due out soon. I know that right hon. and hon. Members will be keen to know about that in more detail.
	The Government are also mindful of new emerging technologies. We have jointly commissioned research to help to ensure that any benefits that might be forthcoming from new technology can be shared across all communities in the years ahead. That is vital. It is terribly important to the Government that the dynamism in rural communities is not lost as regards national wealth creation. It is vital that communications should be as good there as anywhere else. I hope that hon. Members will raise any questions about that with me in the future.
	Secondly, the Government recognise the great importance of the post office network while also recognising the need for taxpayers to spend their money wisely and efficiently, particularly as we face the consequences of the worldwide economic downturn. That is why we are providing a subsidy to the post office network of £1.7 billion. I will say that again, as it is such a large sum: we are providing £1,700 million to secure the future of the post office network, with £150 million a year targeted at the 7,500 loss-making post offices, the vast majority of which are in rural communities. Of course, that action is in stark contrast to the proposals of the two main Opposition parties. The Conservative party would not subsidise loss-making post offices at all, but would allow them to go to the wall as it did when that party was previously in government, when some 8,000 post offices went to the wall. The Lib Dems take the line that they would not let any loss-making post offices close and would write a blank cheque. The sensible thing to do, I think, is to take the middle way and to recognise the importance of the taxpayer while also recognising the importance of rural post offices in their communities— [ Interruption. ]
	Thirdly, Jobcentre— [ Interruption. ]

Dan Norris: I was very kind to give way to the hon. Gentleman, since he had only just walked into the Chamber, so I shall treat his comments with the contempt that they perhaps deserve.
	Thirdly, on Jobcentre Plus, the worldwide recession means that support and help for those suffering in the UK are vital. This is not a time to do nothing. That is why we are injecting £1.7 billion to ensure that people get the support they need now to weather the storm and quickly take advantage of the upturn when it comes. That is why we will not close the 25 Jobcentre Plus offices whose closure was previously announced, and there will be a moratorium on any further closures. Access is an important issue with Jobcentre Plus, but that will mean that more than 50 per cent. of people living in rural communities will live within 5 miles of their Jobcentre Plus centre. That is important, given the large areas covered by some rural constituencies, as we have heard.
	The Government recognise the serious impact that the world economic downturn is having across the country and on rural communities too, of course. I must say that there is no real evidence—I have sifted through much of the evidence in the past few days—to show that rural communities are having a more difficult time than anywhere else. If anything, they are doing slightly better in some key areas.
	Many of the points raised in today's debate have been informed and informative, and I have found them interesting. However, many of the questions from the Opposition have suggested that additional funding is the answer to the problems caused by the economic downturn and being experienced in rural communities. I shall simply close by saying that, if the Opposition feel that extra resources are what is needed, it is very hard to understand how they can advocate cuts of 10 per cent. across the board and think that that will deal with the difficulties faced by people in rural communities or elsewhere in the UK.
	 Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
	 The House proceeded to a Division.

Justine Greening: I beg to move,
	That this House expresses concern over the above-inflation rises in business rates since April 2009 and plans for the 2010 business rates revaluation; notes that all rate-paying businesses have already been hit by five per cent. above inflation rises and that the withdrawal of transitional relief has disproportionately hurt small businesses already struggling to cope with the recession; further notes that regulations relating to the business rate partial deferral scheme are yet to be placed before the House; observes that the additional burden of empty property rates further undermines struggling businesses; expresses disappointment at the failure in the Budget to help businesses and local authorities by making small business rate relief automatic as in Wales; believes that councils should have the power to levy local business revenue rate discounts and be rewarded for local regeneration and business rate growth; and further notes that the retrospective business rates being imposed on firms in ports, many involved in the car industry, will hit firms with a £124 million increase in taxes, risking insolvency and job losses.
	Today's debate is of real importance to businesses across Britain, because the problem relating to business rates and business rate rises is so acute. This country has been in recession since last year, and the impact on businesses and employment has been dramatic. In fact, the most recent figures from the Federation of Small Businesses show that 120 small businesses close down every day. Above all, in the credit crunch even firms with perfectly good business models are going bust, not because they are loss-making, but just because they cannot get the liquidity that is needed. We recognise the problems with cash flow, which is why we have been pressing Ministers to go for our bigger and bolder national loan guarantee scheme to help provide certainty for businesses that are lending credit to one another.
	Members would have thought that Ministers in the Department for Communities and Local Government who look after business rates would have taken particular care in their decisions that affect businesses, but they would have been wrong. In the past few months, when it comes to business rates, struggling businesses across Britain have seen Ministers press ahead with decision after decision that can only make their liquidity situation worse. First, at the end of last year, Ministers confirmed that all companies paying business rates would see a 5 per cent. inflation-busting rise. By the time it was due to hit businesses and our economy, economists were discussing whether deflation was a concern, and the Bank of England was embarking on its quantitative easing. However, Ministers refused to reconsider their decision. In fact, they even refused to prepare an impact statement that considered how such massive, inflation-busting rises would hurt businesses, employment and the economy.

Nick Raynsford: Will the hon. Lady please tell the House how Ministers could have changed the formula, which her party introduced when in government, given that on revaluation, it requires the yield to be maintained, with no discretion for the Government to take a different decision?

Justine Greening: I will make a little more progress, but I will give way shortly.
	Ministers are refusing to reconsider their decision, as we have heard. In fact, they soldiered on for months with their heads in the sand. That was bad enough for businesses that were trying to cope with the recession, but Ministers did not stop there: next down the track came the withdrawal of transitional relief. From what data there are, it is clear that some businesses were hit far more severely than people expected by the withdrawal of transitional relief, which had cushioned the impact of the 2005 rates revaluation for many businesses, but Ministers should have known about the impact that that would have. At a time when so many businesses were on their knees, Ministers again kicked away what could have been a final, extra year of transitional relief, and the impact has been huge. The FSB surveyed members in London and found that of those paying business rates, nearly two thirds faced rises of 6 per cent. or more, and nearly one in 10 faced a rise of over 20 per cent. That masks the fact that a minority in that group faces much bigger rises. I shall come to that shortly.

Justine Greening: It is interesting that the last time the revaluation took place, in 2000, the hon. Gentleman's party chose to adopt a five-year transitional relief. The option to do that again was dismissed by his Government. I have asked the Government what they plan to do in the 2010 revaluation, and we still have no response from them. Part of the problem is bad information. I am happy to send to him parliamentary question after parliamentary question in which I asked how many companies were affected by transitional relief, to which there was no answer.
	The last time any assessment seems to have been done on the impact on businesses of the withdrawal of transitional relief was in 2004. At that time there was no recession. Now we have a recession, but Ministers have not been prepared to revisit any of their decisions. Again, we hear their defeatist attitude—"We cannot do anything to help small businesses. Let's just push on with the plan that we already have."

Justine Greening: I am pleased that the hon. Gentleman is talking to me as though I am already the Minister looking after this brief. We should look at those aspects to see what we can do to help business. He seems already to have gone into Opposition MP mode.
	There is no doubt that for smaller, more marginal companies business rates are one of the largest parts of their cost base, and they are levied whether or not those companies are making profits. We know that more than other businesses, small businesses are prone to be hit proportionally hardest by Government decisions on business rates. One would have thought that that mattered to Ministers, but it did not. Given that they were deciding to put through massive business rate hikes in the teeth of a recession, one would have thought that Ministers might take the time to understand the impact of business rates on more marginal businesses, but they did not. They made no effort to understand how their decision to raise business rates would hurt communities, hurt businesses and cost jobs.
	On the withdrawal of transitional relief, Ministers have known of the pressure of rates on many thousands of businesses since 2004. As I said earlier, in their own consultation paper they even identified the problem. The paper states that at the time, Ministers said that they had been warned that:
	"There are some groups representing rate payers who expect significant rises in their rate bills and who are pressing for a five-year scheme".
	Ministers ignored those concerns.
	Businesses are therefore concerned about business rates rising at the end of transitional relief. Those concerns were raised even before the recession, but even when the situation has got worse and we are in a recession, it does not seem to occur to Ministers to reassess their approach. Who is penalised for the Government's incompetence? Small businesses, which are worst hit because of their size. That often means that they are far more vulnerable to a recession and, as I said, to Ministers raising business rates.
	Many of those small businesses are local shops, and often parades of shops, which provide employment and support communities. They include the newsagent, the laundrette and the corner shop. They are all fighting to stay in business and they are put under more pressure by Government decisions to hike up business rates. Surely the harshest aspect of the withdrawal of transitional relief was its impact on businesses that had played their role in regenerating their communities. They were doing exactly what the Government asked of them. They took risks and set up their businesses in areas that desperately needed better facilities and shops.

Justine Greening: I am pleased the right hon. Gentleman is giving me the opportunity to make sure that the House is aware of our policy of letting councils that can raise business rate take over the next few years keep that increase. That is how we can incentivise local communities and local authorities.  [Interruption.] The right hon. Gentleman says that that is not the question. He asked me what we can do to make sure there is more local impact on business rates and more incentive for local councils.  [Interruption.] If he would let me finish—

Justine Greening: My hon. Friend is right. The backbone of our economy has been our small businesses. We have been described as a nation of shopkeepers. There is a reason for that: our economy has been based on and has thrived on small businesses. Many of those businesses provide vital services to the community. A little anecdote, which Members may laugh at, says it all. I was at a meeting with some of my elderly constituents. One lady mentioned that a laundrette had shut down. She lived on the 14th floor of a tower block and did not have room for a washer in her flat. She would have to take two buses to get to the laundrette.
	Those are vital facilities for people. When I spoke to the owner of my laundrette on Danebury avenue in Roehampton, he told me his business rates would be more than his takings every month. That is what the Government are doing to businesses. It is untenable to say that we cannot reconsider business rates because the legislation and the regulations are already in place.

Justine Greening: I shall make some more progress. I want to make sure that others have a chance to contribute to the debate.
	I was speaking about a group of businesses that have been badly hit, which I hope matters to all hon. Members. Those businesses have gone into areas and tried to help them regenerate by setting up there and encouraging other businesses to do the same. They have done exactly what we all want them to do, which is to get in and provide jobs and facilities in areas that do not have them. Many of those companies have been successful and other shops have opened. What has been their reward? Their rateable value has gone up so they have lost their reliefs, especially in London, as we have heard from the Federation of Small Businesses. What has then happened to them? They face eye-watering business rate hikes.
	I am sure we can all quote examples. Here are a few from my London borough, Wandsworth. Shops on the Old York road in central Wandsworth have had massive hikes. The newsagent Masumin's business rates last year were £260 a month. This year they have shot up to £1,006 a month. The motorcycle business just down the road saw bills rise from £280 a month to £914 a month. The florist's business rate bills went up from £477 a month to £715 a month. The Northcote road, another well known Wandsworth community built around its shopping areas, is full of independent stores such as the Bolingbroke bookshop. Its rates have gone up from £570 a month to £875 a month.
	It is as if Ministers were looking for a way to hurt regenerating areas most. Surely these are the businesses creating jobs and providing facilities in areas that need them. We should be applauding and supporting them, but not this Government and not these Ministers.
	Ministers seem to have had an awareness bypass when it comes to helping companies, especially the smallest and most vulnerable, to survive the recession. We have had the withdrawal of transitional relief, the lumping of inflation-busting rises on businesses and no assessment of how either will affect businesses and jobs throughout Britain. It took a chorus of voices, from the Opposition, the Federation of Small Businesses and local authorities, to puncture Ministers' obliviousness to what was going on.
	That is why my hon. Friend the Member for Mid-Worcestershire (Peter Luff) introduced his private Member's Bill in March—to give the existing 50 per cent. rate relief for the smallest, most vulnerable companies automatically. Currently, they have to fill in a form to claim it, but only about half of eligible businesses do so and local authorities have to put resources into processing their request and doing outreach work to business communities to improve the take-up of the relief. We supported that Bill, along with the Federation of Small Businesses and many local authorities, which knew that they would save administration costs and be able to put them into helping businesses to develop. When it came to the debate, however, the Minister opposed the Bill.

Rob Marris: I am grateful to the hon. Lady for her generosity in giving way, but her tone of wounded outrage lacks credibility, given that her party's policy is to remove £3.7 billion a year of relief on capital allowances for business. That is a huge take, and it would adversely affect, for example, Laundromats trying to replace their washing machines.

Justine Greening: No, I am not going to give way. We have had enough from the hon. Gentleman tonight.
	In the Chamber, we all had a chance to support the private Member's Bill from my hon. Friend the Member for Mid-Worcestershire, but that chance was thrown away by the Minister. In explaining why he would not support the Bill, he said that
	"we are not in a position to be certain that this choice"—
	the private Member's Bill—
	"would deliver the highest and/or fastest benefit to small businesses from the package of wider options on the business rate."—[ Official Report, 6 March 2009; Vol. 488, c. 1145.]
	That was after all that time—all those months and almost a year after the recession began. The Government could have headed off the problem months ago. Ministers threw out that option, and instead the Chancellor finally announced the business rate deferral scheme to help businesses on 31 March—the week after local authorities had issued new annual business rate bills to companies throughout the country.

Peter Luff: My hon. Friend is making a very fine speech and I am sorry to interrupt, but she gives me the chance to give notice to the Minister that I intend to press her on that point. I withdrew my Bill in the face of Government opposition because of clear assurances that they would take on significant elements of it, at least. That has not happened, and I am very disappointed.

Justine Greening: I could not agree more. We all hoped that the Budget would contain some genuine measures to help businesses immediately, and the fact that it did not, in spite of the indications that the Minister provided on the day, was very disappointing—more so for businesses than for MPs.
	Ministers were clear about the objective of the business rate deferral scheme. In their press release, they said:
	"The Government announced today...that it will bring forward regulations to enable businesses to defer payment of 60 per cent. of the increase in their 2009-10 business rate bills until 2010-11 and 2011-12."
	However, that scheme is already unravelling, because one thing that we can assess is that the promise to be able to defer 60 per cent. of the rise in business rates—Ministers' key claim—is not likely to be kept. Until the scheme is operational, businesses have to pay the full rise, and those that have already forfeited the right to pay in instalments cannot take part in the scheme at all. Businesses that have already struggled most with paying the higher rates and need most help to improve cash flow will have no access to the scheme. The logic is completely flawed. We do not know how things stand for businesses that are already subject to recovery action; perhaps the Minister can tell us whether those businesses will be eligible to participate in the scheme.
	As I am sure Members are aware, business rates are paid in 10 instalments, so businesses will have already paid 40 per cent. of their rise by July's payment this year, but Ministers have admitted in answers to my parliamentary questions that their regulations will not even be in place until the end of July. So, how long after that will it take local authorities to issue business rate bills with deferred rises? The local authority representatives to whom I have spoken tell me that it is unlikely that they will be able to go through that process in anything less than five to six weeks, and that is the most optimistic timetable. They need time to write to businesses; businesses need time to decide what to do, to get financial advice, to fill in the relevant form and send it back to the local authority; and local authority and billing agencies need time to change the details on their billing system and then to reissue their bills.
	By the time all that has taken place, we will almost certainly have passed the August payment date, so businesses will have already paid 50 per cent. of the rise and there will be no 60 per cent. left to defer. All that work, which we expect local authorities to do at the last minute, will take place in August, when most people are on annual leave. Again, the Minister might like to confirm our presumption that, as businesses gradually get around to claiming their deferrals, local authorities will end up with different businesses deferring different proportions, which will in turn lead to real complexity in billing, because the situation will depend on how quickly the business fills in the form and has it processed. Some will be able to claim 50 per cent. deferral, some 40 per cent., some 30 per cent. and so on. Ministers have met local authority representatives, so they must know that.
	Will Ministers therefore today finally say that they will bring forward their business rate deferral scheme regulations faster, so that they can really deliver on their 60 per cent. deferral promise? Will they promise all businesses that they will be able to defer 60 per cent. of their business rate rise? Even now, more than two months after the scheme was announced, we have very few details of how Ministers expect their scheme to work.
	For example, rebilling by local authorities for a second time will cost millions of pounds of taxpayers' money, but Ministers say that they do not know how much taxpayers' money will be spent on it. On 1 June, in a parliamentary question, I asked what I thought was a pretty straightforward question of the then Secretary of State for Communities and Local Government. I asked what estimate her Department had made of the cost to central Government and to local authorities in implementing the business rate deferral scheme, but I did not get a straightforward answer. I got a load of gobbledegook, telling me that I would have to wait until the impact statement had been prepared and the regulations laid, and that I would then get to see the impact statement. It did not answer the question at all.

Justine Greening: I will not.
	The now-departed Secretary of State was, to use a phrase, too busy rocking the boat and deciding how to knife her incompetent Prime Minister. She is off the playing field now, but has since admitted that she could not even get that decision right. Businesses all over Britain are going bust every day and thousands of people are losing their jobs, but the right hon. Lady disgracefully and perversely prioritised her own political interest above her vital Government role on business rates.
	In conclusion, many businesses are fighting for their lives, yet the Government have sleepwalked into a business rates fiasco that has tipped many businesses over the edge into insolvency. I am thinking of family-run businesses, often built up over years, whose failure has a catastrophic effect on household income and worklessness. They are all paying the price for the Government's utter incompetence and inward-looking myopia on business rates. The Government have turned their back on businesses' cry for help, but we will not. Businesses may not have a vote, but if they did, they would surely vote to consign the Government and their shambolic attitude towards small businesses to history.

Rosie Winterton: I beg to move an amendment, to leave out from "House" to the end of the Question and add:
	"notes that the Government is providing real help to businesses, with targeted support through the £20 billion working capital scheme, the Enterprise Finance Guarantee Scheme making available £1.3 billion of Government-guaranteed lending, an aim to pay Government suppliers within 10 days, a cut in the main rate of value added tax to 15 per cent., a deferral in the increase in the small companies' rate of corporation tax, free business health checks, over £100 million towards debt advice, the HM Revenue and Customs Business Payment Support Service benefiting over 100,000 firms by spreading a total of £2.5 billion of tax payments, and the extended rate relief for empty properties; recognises the Government's commitment to the annual Retail Price Index cap means there has been no real terms increase in business rates since 1990; welcomes the Small Business Rate Relief scheme providing £260 million of support in 2007-08; supports the fairness achieved by revaluing properties every five years with transitional arrangements to phase in significant changes in rates bills; welcomes the deferral scheme enabling payment of 2009-10 rates increases to be spread over three years to be brought into force by regulations in July; further notes the Local Authority Business Growth Incentive Scheme has provided funding of almost £1 billion since 2005-06; welcomes support for businesses, including in ports, receiving unexpected and significant backdated rates bills by the introduction of an unprecedented eight years to pay; and believes these measures provide certainty, fairness and appropriate relief for businesses."
	I ask the House to support the Government amendment, because the Opposition motion and the speech made by the hon. Member for Putney (Justine Greening) show scant regard for the facts of how the business rates system operates and breathtaking ignorance of the actions that we are taking to help small businesses—actions that, on many occasions, the Conservative party has opposed.
	The Government are taking real action to help businesses through the current economic downturn—and often in the teeth of Conservative opposition, as I said. The Government have recognised the effect that the downturn can have on small and medium-sized businesses, as well as on large businesses. We are taking action at international, national, regional and local levels. The Government have put in place a mechanism through which businesses can defer tax payments. We have introduced the enterprise finance guarantee and additional funding for SMEs through the European Investment Bank, and are providing support for small businesses during the economic downturn.
	We continue to take measures. For example, in the Local Democracy, Economic Development and Construction Bill, which is being discussed in Committee, we are considering giving local authorities specific powers to help local businesses in the economic downturn. Every clause, however, has been opposed by the Conservative party, as my right hon. Friend the Member for Greenwich and Woolwich (Mr. Raynsford) will acknowledge.

Rosie Winterton: I am surprised that the hon. Gentleman says that, particularly when so much of what we have tried to achieve has been opposed by Conservative Members.
	Let me give some facts. Her Majesty's Revenue and Customs has agreed with 100,000 businesses the deferral of more than £2.5 billion in business taxes. The enterprise finance guarantee has provided an initial £1.3 billion of bank lending to SMEs. So far, 26 lenders, representing 90 per cent. of SME lending, are signed up. Eligible applications from more than 3,600 small businesses, totalling more than £400 million, have been assessed, are being processed or have been granted. That does not seem to be an indication of a lack of action, as opposed to the do nothing attitude of the Conservatives.

Rosie Winterton: As I said, I am more than happy to take away requests that have been made for that information, because it is important that we are able to show the help that has been available. Perhaps Conservative Members would like to make a guesstimate of how many businesses would have been helped by opposing all the measures that we tried to take. It would be interesting to see if they were content to admit that if one says that one is going to do nothing, that is what happens to businesses.
	I think that the current business rates system is a fair way of ensuring that the burden of tax is fairly distributed across all businesses. Before 1990, as several of my right hon. and hon. Friends have said, rates were set and collected locally. The problem that was seen with that approach was that many businesses felt that they had little or no certainty over their business rate bills: they complained that they might be paying different rates in different areas, and that they might be told of their liability only a few days before the start of the financial year. The system that came into effect in 1990, which was enshrined in legislation introduced in 1988 by the previous Administration, changed the way that business rates were collected, bringing greater certainty, not least because businesses know that between revaluations the multiplier will not change by more than inflation. Many of the issues that we are debating are an integral part of that system.
	In 1990, we saw the first business rates revaluation of property since 1973. Before that time, values had become hopelessly out of date; that is why the new system requires revaluations every five years. The point of that, for a business, is that rateable values and therefore rates bills are based on up-to-date information, so the yield from the rates is spread fairly across different ratepayers.

Rosie Winterton: I will come later to the fact that we have listened to what the ports have said. My predecessor, my right hon. Friend the Member for Wentworth (John Healey), listened to what was said about the liability and changed the system so that the payment back is now spread over something like eight years. I do not know whether the hon. Lady is committing her party's Front Benchers to completely abolishing any responsibility for liability, and I do not know how that would be paid for, but I shall come to the changes that we have made.
	On top of what happened in 1990, since 1997 we have introduced measures to improve the system further, including the small business rate relief scheme, which provided more than £260 million a year of help by 2007-08. There has been some mandatory relief, particularly for community amateur sports clubs, and the business rates deferral scheme will allow 1.6 million businesses to defer liabilities totalling about £600 million this year.

Rosie Winterton: I can assure my hon. Friend that I will come to the issue of empty property rates.
	To return to the new valuations—this also picks up on the point that the hon. Member for North Cornwall made—they were completed at the beginning of this month. We are looking at the results, and I hope to be able to say a little more in the next few weeks. However, we can expect those sectors and locations that have done well in recent years to see increases in bills, whereas those that have not fared as well are likely to see reductions. That addresses some of the points that the hon. Gentleman made.
	All the rateable values will be published at the end of September. At the same time, we will provide a business rates calculator to help ratepayers estimate their rates bills for 2010. That is something that we introduced in 2005, and it has been helpful to businesses that wish to plan ahead. Under the previous system—this relates to my earlier point—there was a problem, because people did not know what their rates were likely to be, sometimes until the last few weeks of the financial year. However, the excellent business rates calculator will help people to plan ahead. We introduced it because we know how important it is to businesses to plan ahead.
	We will make even more improvements to the business rates calculator, so that by October, business rate payers will be able to estimate their 2010 rates by using their 2010 rateable values. In addition, for those ratepayers who face increases in the 2010 revaluation, we will introduce transitional arrangements to phase in those increases. Again, although not resiling from the system that was introduced, we are looking at ways of helping people where specific problems have arisen, first, from the 5 per cent. increase and, secondly, from some of the revaluations, and as I have said, we will consult on those.
	At the last revaluation, in 2005, we introduced a transitional arrangement scheme, which lasted for the first four years of the five-year rating list. The idea was to ensure that all ratepayers paid their normal rates bills for at least one year of the rating list. Those ratepayers affected will have had four years to plan for their 2009-10 rates bills. The hon. Member for Putney said that the Government had ignored the responses to the 2004 consultation paper. There were 66 responses, and although nine favoured a five-year scheme, 44 favoured a four-year scheme ending on 1 April 2009, so we did listen to the responses in 2004. We also listened, again, to businesses when they faced increases, and that is why we introduced the deferral scheme. With respect to the ending of the transitional relief scheme, we listened to people, and that is why we introduced the transitional relief scheme for the increases for 2005 to 2009.
	With respect to the laying of regulations for the business rates deferral scheme, I can assure the House that we are working on introducing the necessary legislation for the scheme by the end of July, as we explained on 31 March, when it was first announced. Those regulations will cover the deferral of the 5 per cent. retail prices index increase and the deferral of increases faced by those businesses losing transitional relief from 1 April 2009.
	My hon. Friend the Member for Sunderland, South (Mr. Mullin) and others have raised the question of empty property reliefs. I am sure that hon. Members will recognise that, previously, landlords had no incentive to find tenants for their empty properties. As a result, rents in UK cities ended up being higher than they might otherwise have been. That is why we removed many of the exemptions and reliefs for empty properties. To reintroduce such a relief would cost as much £950 million a year, which would have to be found from other areas of taxation or through public spending cuts.

Rosie Winterton: Let me briefly address the issue of levying local— [Interruption.] Well, I think I have addressed the hon. Gentleman's points and the real issues around them. I do not see the point of repeating it all again. I have been pretty clear about where we believe the difficulties lie.
	As regards councils having the power to levy local business rate discounts, I have said that we already have several rate relief schemes targeted at businesses, amounting to something in the region of £900 million in 2008-09. Further discounts—this is a point that the Opposition need to answer—would mean that the amount collected would be smaller, so we would have to ask local authorities to contribute more, which would have an effect on council tax payers.
	This Government have a great track record in delivering funding and policies that will play a major part in regenerating our cities and supporting our local authorities to ensure regeneration and economic renewal. It is absolutely clear that we understand the impact of the business rates system on businesses and that, particularly because of the international credit crunch and economic slowdown, we are looking at the effects on people and businesses.
	I shall very briefly touch on the issue of businesses in ports. As I have said, my right hon. and noble Friend the Secretary of State has already taken action. As to the allegation that the revaluation was somehow a desk-top exercise—it was made by the hon. Member for Meriden (Mrs. Spelman), who I see is not listening to a word I am saying, but there we are—it was, in fact, based on more than 300,000 actual rents collected by the Valuation Office Agency and analysed for the revaluation. I wanted to clarify that point.
	Finally, it is the Government's package of measures—the introduction of the business rates deferral scheme, the small business rate relief scheme, a fairer revaluation scheme and so forth—combined with the real help offered to businesses through structured support at local, regional and national levels that will make the difference. In contrast, the Opposition offer nothing but ill thought out ideas and empty promises. That is why I urge the House to reject the Opposition motion and support the Government amendment.

Julia Goldsworthy: I think that hon. Members of all parties would agree that we are living in unprecedented economic times and that many small businesses probably feel as if they are facing an onslaught from all sides. We have already heard that an accountancy firm has predicted that nearly 34,000 small businesses—120 a day—will close in 2009 and that difficulties paying their business rates may well be a factor for some of them. However, it may be that businesses have suffered from falling incomes, unaffordable rents, delayed payments from suppliers or trouble paying their tax liabilities. Their difficulties might be compounded by personal economic problems, too.
	If Back Benchers get the opportunity to contribute to the debate—if I carry on for as long as the two previous speakers, we will move straight into the concluding speeches—I am sure we will hear about similar experiences from businesses all over the country. The motion at least provides us with an opportunity to raise constituency experiences.
	I find it slightly odd that the Conservatives' motion is drafted so narrowly. It deals specifically with business rates, rather than with all the other issues that might interact to cause difficulty to businesses. What I also find rather bizarre is the similarity of the wording of this motion to that of a motion that was debated on a Conservative Opposition day on 25 March this year. That motion also referred to the rate of inflation based on business rate rises, the ending of transitional rate relief, support for a move to automatic business rate relief, and the 2010 revaluation. It condemned the ending of empty property rate relief, and highlighted the issue of the ports.
	I think that there can be only two reasons for that. It is possible that the Conservatives' current spokesperson was not in her post on the earlier occasion, and has either been doing her homework very assiduously or did not realise how similar this motion was to the earlier one. Alternatively, it may well be that the Conservatives have so little positive policy that they have to rotate it, so that it comes around every couple of months on their Opposition days.
	This is clearly a significant issue, but it would be more helpful if Conservative policy had moved on since that debate at the end of March. That leads me to wonder whether the Conservatives considered the issue to be the main factor affecting businesses, or whether they simply have nothing to say about anything else. I am not entirely sure of the answer to that question. Judging by the last Opposition day debate that I sat through—on housing—I suggest that the Conservatives simply have nothing to say.
	What the Conservatives have to learn is that if they want to say with credibility that they can form the next Government, they cannot just oppose things; they must propose things as well. It is clear that the motion will not take the debate about local government finance any further forward. I think that, if anything, it will increase confusion rather than providing clarity. It is a critique of the Government's failure to address problems relating to business rates, but it also criticises measures that the Government have tried to take to address those problems.
	For example, the Minister described the deferral scheme that the Government want to introduce. What the Government had not realised was that the problem had been caused by a double whammy: the very high increases in inflation combined with the end of the transitional scheme. I did not catch what the Conservatives said that they would do differently. They attacked the ending of empty property rate relief, but they did not say what they would do themselves.
	Another issue was not raised. In some areas, the problem is not just that businesses are in accommodation that will be very expensive if the empty property rates continue. In my constituency, the problem is risk aversion. A massive regeneration scheme is taking place there, part of which involves new accommodation for businesses. What investors will take the risk if they think that a property will be left empty, and that that will cost them a huge amount?
	What we also heard from the Conservatives was an interesting critique of how the port rating process had gone wrong. Again, however, we gained no clear sense of what they would have done differently, or of how they planned to put the wrongs right.

Julia Goldsworthy: No; instead I will try to make swift progress so as to give the hon. Gentleman a chance to make his own contribution.
	We think that the automated business rate relief is a sensible idea, but it is not an entirely original idea because it has already been achieved in Wales. I was disappointed by the Government's justifications for not introducing it. The reality is that half of all eligible businesses do not claim the relief, and automating it will therefore make the whole process more efficient, not more costly.
	Although there is, perhaps, consensus on this issue, I am not entirely sure what the hon. Member for Putney (Justine Greening) committed her party to. The Leader of the Opposition continually calls on people to vote for change, but the evidence at present suggests that it would be a vote merely to change the labels on the same tin. There is no radical rethink. If we really want to understand what is going on in this regard, the name of the party gives the game away: the fact that they are called the "Conservatives" means that they generally want to change things back to the way they were before—and therefore they do not want to revalue, nor to set business rates according to inflation, nor to change anything with regard to the way business rates work. We heard nothing about anything they would do differently. As I have said, their approach is intellectually incoherent. It is consistent only with the way they look at another aspect of local government finance: council tax. Their approach is that the system is broken and unaffordable, but the way to solve that is, apparently, not by revaluing, and we will therefore end up having a system of local taxation based on property values that are decades out of date. They either need to say the system of council tax is bust and that they will replace it with something else, or they need to defend the council tax system and offer a revaluation.  [Interruption.] The hon. Member for Putney asks from a sedentary position about my party's position. Our position is very clear. It involves changing the balance of funding so that more that is spent locally is raised locally. That will partly be achieved through localising business rates entirely and moving to a system of local taxation based on the ability to pay. We are very clear about that, and we are very happy to explain how we will achieve it. The Conservatives, however, have not said what they would do.

Julia Goldsworthy: No: I wish to make progress as I am aware that there is very little time for Back Benchers to speak.
	The Government's response to the Opposition motion is equally inadequate. The exchange this evening echoes one outside the Chamber in which the Conservatives and Labour try to blow chunks out of each other's spending plans. Instead of having a debate about what the level of future funding should be and what difficult decisions need to be taken, we have two parties arguing at cross-purposes. While the Conservative motion is so narrowly drawn as to be highly limiting, the Government response is merely to produce as long a list as possible of all the things they have done or have said they might do at some point in the future. What we did not hear from the Minister is whether these measures and pronouncements have been effective. That is unsurprising as, to put it charitably, the results have been patchy. They praise themselves for righting wrongs that were their responsibility in the first place. They also praise themselves for extending the relief for empty properties, but fail to point out that they did so only in response to extreme pressure, and that at the end of the day that is only deferring pain for another year. Moreover, in terms of their proposals to defer payment for some of this year's inflation-busting 5 per cent. increases in business rates, they have not acknowledged that the whole process of trying to address this is still causing pain for businesses, which are having to make those payments as we speak. The Government motion says that their behaviour has provided "certainty" and "fairness", but it is very difficult to see how either has been delivered.
	The Government praise themselves for policy proposals that have had a limited impact. They say that they
	"aim to pay Government suppliers within 10 days".
	I am not entirely sure what that has to do with business rates, but their performance in that regard is patchy even within Government Departments. Whereas the Department for Communities and Local Government has managed to hit 88 per cent. of payments, the Home Office figure is just 50 per cent. They therefore have a lot to do to improve their own record.
	The amendment praises the regional development agencies for being at the cutting edge of supporting businesses. Again, that is nothing to do with business rates, and the reality is far from what is claimed.
	The Minister will know from our discussions in the Local Democracy, Economic Development and Construction Bill Committee, that the South West of England development agency has unilaterally decided to cut more than £50 million of projects, which are in place to support and create jobs in the region, including in my constituency. The RDA has done that without any consultation, yet the Government's amendment contains praise for some of the activities that are going on.
	Many have reported that they think the benefits of the enterprise finance guarantee scheme and the working capital scheme have been limited. Nine out of 10 of more than 2,000 entrepreneurs and business owners surveyed stated that the Government are not supporting small and medium-sized enterprises sufficiently, and the majority of respondents were not even aware of the schemes that were designed to support them. More than half of all SMEs have never heard of any of the schemes, and eligibility, red tape and issues relating to efficiency are creating an insurmountable barrier for many, yet the Government's amendment has the audacity to claim that the VAT cut has helped people. Once again, instead of permanent solutions to make the tax system fairer and to support businesses, we are seeing a deferral of more pain later and billions of pounds being wasted on something that most businesses say has not benefited them or has actually cost them money.
	If the Conservatives' approach is to say as little as possible, the Labour approach is to produce as long a list as possible, irrespective of how effective any of the measures have been on the ground. I wonder whether there is a parallel with the First Secretary of State, Baron Mandelson of Foy in the County of Herefordshire and Hartlepool in the County of Durham, in that the longer and grander his title and the more Ministers serving beneath him, the more effective he thinks he is. Such an approach has also been taken in this Government amendment but it fools nobody.
	This argument at cross-purposes has missed the fundamental point: local authorities are already doing a huge amount on the ground to support businesses, they understand what the problems are and they are best placed to tackle them. I could cite examples of how local authorities have been examining their procurement of services and instead of just setting an arbitrary figure of 10 days in which to pay their bills, which probably would not be hit, as is the case with the Departments, they are trying to create a level playing field for contracts that allows consortiums of local businesses to get together to make their bids. It is that kind of thing that will make the real difference, not press releases.
	More should be done to push down the budgets of regional development agencies to make decisions on spending more accountable, and we should be freeing up councils to reinvest in housing. These are all things that would help not only to tackle this country's affordable housing crisis, but to support the economy and jobs. What both the Conservatives and Labour have failed to realise is that what is needed is not tinkering around the edges or a long list of initiatives; what is needed is a fundamental change in the relationship between central and local government, because that is needed if people's confidence in those institutions is to be restored.
	Lots of politicians have been keen to jump on this particular bandwagon and to make the connection between MPs' expenses and the need for constitutional reform, but people have not realised that if businesses' and individuals' trust in all levels of government is to be restored, there needs to be a clear statement of the terms of the relationship and work at the grass-roots level to rebuild that relationship. At the national level that might mean constitutional reform, but change needs to take place at the bottom too. That is not only about ensuring that there is proper participation and that decisions about how public money is spent are accountable, but about making a much clearer link between the local taxes that people and businesses pay and the services that they receive in return.
	That link does not exist at the moment. On average, council tax funds about 25 per cent. of the services that are provided locally, and although business rates are collected locally they remain centrally distributed despite the fact that most businesses think their taxes are directly paying for the services that they receive locally. Both aspects of taxation need to be fundamentally changed to make the relationship clearer and to ensure that there is a much stronger link between what is raised and spent locally. As I have said, that means moving away from a regressive council tax system to one based on the ability to pay. Alongside that, business rates must also be localised. Only if those changes are taken together will that stronger link be made clear and people will be able to see what they are getting and how they are paying for it.
	The last thing that we need are the temporary measures that the Government have announced—deferring corporation tax increases, deferring empty property rates, deferring business rate increases and introducing temporary VAT cuts—which provide no certainty and will do nothing to give people confidence. Instead we need permanent changes to make the system fairer and clearer to everyone, individuals and businesses alike. But neither Labour nor the Conservatives are prepared to face up to that fact, let alone engage in the debate. That is the biggest disappointment of all.

Mr. Deputy Speaker: Thirty minutes remain before the winding-up speeches and six hon. Members wish to contribute. I leave it to them to see how equitably they can share out that time between them.

Clive Betts: When I saw that the Opposition had raised the question of business rates, I thought we would be having a thoroughgoing, wide-ranging debate on the principles behind business rates and how we might do better. Instead, we had a niggardly and rather empty proposal criticising various aspects of the mechanics of the current system. I was surprised that the party that is now supposed to believe in localism did not go for something a bit more radical.
	I am also disappointed that the Minister for Regional Economic Development and Co-ordination, my right hon. Friend the Member for Doncaster, Central (Ms Winterton), with whom I agree on most issues, was not prepared to be more radical. I agree that we need constitutional reform in this country, and one of the most important aspects of that is to improve the balance of power and responsibilities between central and local government. We need to ensure that there are more powers and responsibilities at local level, and I commend to the House the report recently produced by the Communities and Local Government Committee, on the balance of power between central and local government.
	If we are to get the balance of power right and push out more responsibilities and powers locally, we have to ensure that we get the balance of funding right and give local councils more responsibility for raising the funding that pays for their services. I noticed that the words "local income tax" did not pass the lips of the hon. Member for Falmouth and Camborne (Julia Goldsworthy). I wonder whether there is a shift in policy coming from the Liberal Democrats. The easiest way to transfer more powers for raising money to local government would be to localise the business rate and put it back to where it was before the poll tax led to the changes.
	Of course, the Government need sufficient resources so that they can equalise the situation, on the basis of resources and need, between councils with different abilities to raise money and differing needs. The estimate is that the Government need to control about 30 per cent. of the money spent at local level to do that, not the 75 per cent. of money that they control now. Transferring business rates would actually give local authorities the right to raise about 50 per cent. of their own resources directly, and that would be a significant change, which I would commend. I know that the Lyons report looked at that, but did not recommend it. The report did recommend the supplementary business rate, and the Government have introduced that in principle, although they have not gone as far as Lyons wanted. I know that the Government are also looking at measures such as the community infrastructure levy, which will provide some powers at local level to raise the additional resources for councils to spend.
	There is a fundamental problem, however: not merely with the gearing of council services, because local authorities raise so little of the total money that they spend at local level—only a quarter—but with the disconnect between development, the costs it brings and the extra resources that are provided for an area. This country differs from many others in the EU, such as Germany, which has a much bigger incentive to look positively at development because the benefits of the taxes generated by it come back to the community in which it takes place. That is a big issue that needs addressing.
	My right hon. Friend dealt adequately with the other issues. Yes, 5 per cent. inflation looks like a large increase, but there is the possibility next year of a minus 3 per cent. figure for the retail prices index, which shows that the linkage right. Over the years, businesses have had a good deal. Since the council tax was introduced, the amount that it contributes to local authority resources has risen from 21 to 26 per cent. At the same time, the amount contributed by the business rate has fallen from 28 to 20 per cent. Over the long term, council services, even with efficiency savings, are always likely to need more money spent on them year on year than RPI, because wages at local council level are likely to go up faster than RPI. If the business rate is held down at RPI, it is likely to contribute a smaller and smaller amount towards the payment of council services. That is why, over time, businesses have not done too badly.
	Finally—

Geoffrey Robinson: I suggest that there is probably a lot of support for what the hon. Member for Northampton, South (Mr. Binley) has just said and that making the relief automatic would help in several ways. However, time is brief and I want to put to Ministers a specific proposal for saving some money for small companies in the city of Coventry at this difficult time.
	Coventry's Business Improvement District company has been referred to already today. It is full of good intentions, but unfortunately it has proved to be inadequate and delinquent in its duties. Electoral reform is much in the air at present, and all forms of voting are subject to review, so I put it to my right hon. Friend the Minister for Regional Economic Development and Co-ordination that she could have another look at the requisite level of approval from small companies that these BID projects need. The one in Coventry was passed with just 18 per cent. of the companies being taxed actually voting in favour, and that is a very low figure indeed.
	A lot of false promises and representations were made by the BID company that have simply not been met—in respect of security and CCTV cameras, and of broadband, to which the Government and all businesses are very committed. The provision of broadband is running over a year late already, while the CCTV system—which was promised with back-up policemen and all that sort of thing—covers only a small percentage of the premises that are paying for it.
	The local authority supports the BID project, but it has been mooted that some rebate would be in order. This is a terrible time for small companies in the city of Coventry, and the payments are still strongly resisted, as I shall describe in a moment. I put it to my right hon. Friend the Minister that both a rebate and a deferral could be used to gear the payments, and that that would be absolutely in order and very necessary.
	The extra tax, of course, is levied on charities, but supermarkets and leisure centres are exempt. That makes no sense at all. The charities affected include the British Heart Foundation and Coventry's Ring and Ride project, both of which are being made to pay the tax. I think that the bailiffs are being sent in to the 140 companies that are unable to pay, so the full force and rigour of the law are being brought to bear for no better purpose that I can see than to expose the inadequacies of the BID company.
	In addition, rates are being levied on small companies to fund CV One, which is a Coventry city council initiative—a very admirable initiative, I am sure—to boost the image of Coventry. In many respects, the city suffers from a relatively poor image, despite its many advantages. A select group of companies have been picked out for the privilege of paying £400,000 a year, when the whole of Coventry is meant to benefit from the initiative.
	I ask my right hon. Friend the Minister and the Government please to get in touch with the BID company. I beg her to ask the company to answer my questions, which it refuses to do with an arrogance that one cannot believe. Please may we push through a deferral—that is very much at the heart of the Government's rates proposals—and a rebate to the companies in question?

Michael Penning: I ask the new Minister for Regional Economic Development and Co-ordination to listen carefully to the points that I will make. In an intervention, I tried to raise a very serious issue that has a massive effect on the business community in my constituency. It has to do with empty property rates, which have changed so that the exemption from them drops after six months. It is absolutely ludicrous, if not immoral, that businesses that have no choice—none at all—but to be outside their premises should be caught by the rates on empty properties. In my constituency, the main reason for that happening was the Buncefield disaster that took place in November 2005.
	Lord Newton, who did the best that he could in the inquiry undertaken on behalf of the Government and the Health and Safety Executive, said in his conclusions that there needed to be a special economic status for places such as Hemel Hempstead, which was badly damaged by a disaster that was not its fault. Through no fault of their own, businesses were literally blown out of their premises. Some of the businesses have actually demolished their premises—levelled them off—so that no business rates are due. The sites are lying fallow. Nothing will be built on them until after the civil case before the High Court is heard, and until the criminal prosecution has taken place. I will not talk about that, because those matters are sub judice.
	The premises of businesses that do not have the money, or whose insurance companies have not paid out, are sitting there, derelict. 3Com is a good example; its premises are in the middle of my constituency, right next to Buncefield, and they are completely derelict. The company is liable, believe it or not, for business rates. The disaster took place in 2005; we are now entering the summer of 2009 and it is not the companies' fault that they cannot return to their premises. It is not the fault of my local authority, which has done a fantastic job in helping businesses to get back into some of the premises. It is the fault of some of the insurance companies, which were, frankly, slow or belligerent in paying out. However, the biggest problem is that we still have two huge court cases going on—one for compensation, and one a criminal prosecution. The businesses are stuck; they are in limbo; they cannot move back into their premises.
	Obviously, some businesses are paying business rates, rent, and mortgages on new properties. The insurance companies have helped out with the new capital costs, but the businesses are liable to pay business rates on premises that are derelict, and they cannot move back into them. Some of them are not willing to move back into their premises simply because they have a duty of care to their employees, and they are not happy about moving back in until the Government have made decisions about the safety of premises that surround oil depots such as Buncefield—the recommendations are yet to be made—and until the two court cases are concluded.
	Surely, in such a debate, the Minister could have said, when I intervened, that it was difficult to answer my question straight from the Dispatch Box. Instead of ignoring my intervention, she should have done me the courtesy of saying, "I will write to you about the matter; it is a very specific issue." Instead, very unusually for the Minister—I have worked with her before—she completely ignored my intervention, which was on an issue that means a huge amount to my community and for business confidence in my constituency. Our enormous plight cannot be ignored. There is a recession going on, and there is a blight on my local business park. That is not our fault; it was the fault of the oil companies, from whom we are trying to get compensation. In the meantime, I would have thought that a little help from the Government would not have gone amiss.

Alan Whitehead: We are addressing a serious issue this evening—how businesses may get the best help possible through the recession, which has been sudden and in many instances relates to circumstances that changed rapidly last year. We should consider various types of help, a number of which have been mentioned. However, as hon. Members have pointed out, the Opposition chose to address not that wider issue, but the specific and narrow topic of business rates, which is one of the issues, but by no means the only aspect of support for businesses in a recession.
	The motion, concentrating on the business rate, states that
	"businesses have already been hit by five per cent. above inflation rises".
	If one chooses to make the focus of the debate so specific, it is essential to have some answers to the questions that arise from such statements so that the debate can be taken seriously. If one says that businesses have been hit by above-inflation increases, one presumably has to say that it would be a much better idea if businesses were not hit by above-inflation increases, in which case one must presumably refer to the original legislation on business rates passed by the then Conservative Government, which stated that an retail prices index indicator should be put in place to determine business rate increases each year.
	The question then arises whether the solution is to change or abolish that legislation. Should there be no increases in business rates, or smaller increases? Both of those would require the original legislation to be changed. If one goes for no increases, one must answer a further question. Each year that formula raises about £1.3 billion in business rates, which goes towards the local government pot, so to speak. If that element is removed, one has to decide how the pot is to be replenished. Will the general taxpayer have to pay an additional grant towards the local government settlement, or if no one is to pay, will there be a cut of £1.3 billion in local government spending? One ought to be straight about that, if that is what is proposed.
	I have attempted to find some answers, and not just for the purposes of the debate. I listened carefully to the presentation from the hon. Member for Putney (Justine Greening), but I got no answers from that at all. Indeed, there was obfuscation about the proposals. I read an impressive-looking document entitled "Control shift—returning power to local communities", the Conservative policy on local government. It is a long document, 23 pages in 10-point type. In it there is not a word about business rate construction, how business rates might work in the future, whether the RPI formula would be adhered to or whether changes would be made to it.
	There is not a word about revaluation or how it might be changed. Revaluation has taken place every five years since 1990 and each time transitional arrangements have been put in place. There is one line about discretionary power to levy business rate discounts, and the document states that that can be given to local authorities
	"as long as they can fund them from other local income or avoided costs"—
	that is, can they find the money from somewhere else, perhaps the council tax payer, or perhaps by cutting services? The document contains no answers.
	If it is decided not to change the legislation, deferring business rate increases is a logical step to take. Next year's RPI is likely to be negative, and businesses that know that will be able to decide whether they wish to smooth the increase out over a couple of years, take a greater discount now and a lesser discount later on, or go for no discount now and therefore receive a substantial decrease in their business rates for the following year. Businesses will make that logical move if they have the answers to the basic questions. If one does not know what is happening to the basic nature of business rates, and one appears to be unaware that the increase arrangements and transitional arrangements are enshrined in legislation and if one is unaware that revaluation is the basis on which one redistributes—and not increases—the pot, businesses will say other things. That is essentially what has happened tonight.
	There are real issues with the business rate, and I have concerns about port rates and empty property rates, too. I am very concerned about help for businesses in the recession, but an Opposition party that wishes to be the Government at some stage is misleading businesses and is not being straight with them if it purports to help businesses in the recession, but does not provide them with basic information about what it will do to stabilise their arrangements.
	Tonight has been a shocking missed opportunity to discuss the real issues. Instead, some Members have discussed a number of peripheral issues that, although important, not only do not constitute the whole issue of how we help businesses but serve to obscure the true lack of substance in Conservative policies on local government.

Brooks Newmark: We have heard much about the challenges that many of us have seen in our surgeries when representatives of small business have chatted to us. I had a meeting with people from the Essex branch of the Federation of Small Businesses who told me about the challenges that their members face, with margins being squeezed, banks not supporting them and so on. They raised the issue of rates: rates seem to be rising above inflation, which brings challenges, and the organisation has expectations of how local councils can help its members.
	There are three issues to do with local business rates. One that has been highlighted for me was the difficulty that small businesses have in paying them. The Local Government Association has warned that, as it is,
	"More than half of all councils (56 per cent.) are reporting that firms in their areas are having difficulty paying business rates to local authorities".
	It has also warned:
	"Eight out of ten councils are reporting an increase, or anticipated increase, in businesses requiring support."
	Businesses are being driven away. A business in Witham in my constituency is being charged £200,000. It can move its whole operation to China, and is doing so—with the loss of 100 jobs. With that £200,000, it can have the whole businesses run elsewhere. That is a great shame; our towns are being gutted and businesses are being driven to close down. Councillor Margaret Eaton, the chair of the Local Government Association, said:
	"The recession is claiming around 85 small businesses every day and many need every single last bit of help and support to get through tough times. There are examples where businesses are going to see their rates bills double or even triple—this just isn't acceptable."
	I totally agree.
	What are the solutions? We heard one today from my hon. Friend the Member for Mid-Worcestershire (Peter Luff), who proposed his own private Member's Bill, the Small Business Rate Relief (Automatic Payment) Bill, which would have rendered the relief automatically payable to eligible businesses, as it is in Wales. In another example, Braintree district council has proposed spreading rate payments over 10 points in a 12-month period, and breaking it up into 10 per cent. pieces over 12 months is a good solution. There is also the flexible rates solution, whereby local councils have discretionary powers. That idea does not mean that they have to make up the money from elsewhere, and allowing for some flexibility on rates will help draw in new businesses.
	As the hon. Members for Sheffield, Attercliffe (Mr. Betts) and for Falmouth and Camborne (Julia Goldsworthy) said, we want local businesses to have a say. I chaired a meeting in Braintree to make sure that local businesses there had a say; local business people met local council representatives to say what they wanted to be done, and that was important. I also want to mention the Essex bank, which will support local businesses. It is a creative solution from Essex county council, whose work I applaud.
	In the last 10 seconds, I should like to make one final plea, which echoes the words of my hon. Friend the Member for Hemel Hempstead (Mike Penning) and the hon. Member for Sunderland, South (Mr. Mullin). I ask the Government to review the pernicious charging of rates on empty properties; that has led to properties being destroyed up and down the country.

Stewart Jackson: The fact that this subject has been chosen by Her Majesty's Opposition for our allotted half day demonstrates how important to our economy we consider the business sector, particularly small businesses and their providing a path out of recession. No Labour Member has mentioned that business rates are a fixed cost, the pain of which has a bigger impact in a recession. We Conservatives believe that the Government's policies—especially those on business rates—are inflicting significant damage on the business sector. The strength of feeling across the House reflects the fact that many of the 4.7 million small businesses in our constituencies are experiencing unprecedented grim times.
	We began with an excellent speech from my hon. Friend the Member for Putney (Justine Greening); it was a polished and forensic demolition of the Government's lamentable record. I am sorry that the right hon. Member for Greenwich and Woolwich (Mr. Raynsford) was not able to make a speech. However, he made an intervention that showed a "computer says no" and a "It's not me, guv, it's the formula" approach to the policy. We heard about the impact of above-inflation rate rises. The ending of transitional relief was also mentioned; Ministers disregard the impact of that on local small businesses. My hon. Friend talked about the impact on sustainability and on small businesses such as the launderette, post offices and small shops in her constituency.
	We heard an intervention about uniform business rates, but although the Government have been in power for 12 years they have not altered the system that obtained when they were elected. Mention was made about the failure of the Government to honour their clear objectives and undertakings to my hon. Friend the Member for Mid-Worcestershire (Peter Luff) on the automatic payment of small business rate relief; I hope that the Minister will touch on that issue in her response.
	We also heard about Government incompetence and the over-complex and bureaucratic system of business rate deferral schemes, particularly for marginal businesses. The Government's complete inability to come up with a clear answer about the estimated cost was also discussed. There was an interesting discussion on the rate revaluation in April 2010. My hon. Friend the Member for Meriden (Mrs. Spelman) put forward empirical evidence about the impact of the relevant legislation in respect of the Valuation Office Agency, particularly in Wales.
	A game effort was made by the Minister for Regional Economic Development and Co-ordination, new to the team. She did well in trying to persuade us that this zombie Government are still alive and making a difference. Many of her remarks, however, were clichéd platitudes based on discredited dividing lines—the facile, do nothing schtick that we expect from the Labour party. There was no recognition of the gravity of the recession, which is the worst since the second world war. In particular, and in stark contrast to the hon. Members for Liverpool, Riverside (Mrs. Ellman) and for Great Grimsby (Mr. Mitchell), the Minister showed a complacent attitude to the ports tax. We knew that she was in trouble, because she was citing the predictions of the Chancellor of the Exchequer, and people are always struggling when they have recourse to that resource.
	We heard a number of key points from hon. Members from across the Chamber. The Minister failed to convince the hon. Member for Sunderland, South (Mr. Mullin) about empty property rates and failed to persuade the House about the business rates deferral scheme. Furthermore, she failed to persuade my hon. Friend the Member for South-West Norfolk (Christopher Fraser) that she can provide any meaningful, demonstrable data about the help that the Government schemes have given to individual businesses. I would be interested if the Under-Secretary could shed some light on that.
	My hon. Friend the Member for Mid-Worcestershire prayed in aid John Cleese and "Clockwise", but this Government are clearly more akin to Monty Python's dead parrot, as we are well aware as each month goes on.
	The speech by the hon. Member for Falmouth and Camborne (Julia Goldsworthy) was proof positive, if it were needed, that the Liberals remain at best a wholly owned subsidiary of the Labour party, and at worst a complete irrelevance. She avoided a straightforward commitment to local income tax, and effectively spent 17 minutes saying not very much.
	The hon. Member for Sheffield, Attercliffe (Mr. Betts) gently chided the timidity of his Front Benchers, but himself took a rather nonchalant approach to how local businesses across the country are struggling in this recession. We heard an excellent and knowledgeable contribution by my hon. Friend the Member for Northampton, South (Mr. Binley), and a rather esoteric discussion of business improvement districts by the hon. Member for Coventry, North-West (Mr. Robinson).
	That doughty champion of his constituents, my hon. Friend the Member for Hemel Hempstead (Mike Penning), raised a vital point about the impact of empty property rates on involuntarily empty properties, at Buncefield in particular. We had a rather, if I may say so, tedious parody of a party political speech from the hon. Member for Southampton, Test (Dr. Whitehead); I am glad that I never had to suffer in his university lectures. Finally, we heard an interesting speech by my hon. Friend the Member for Braintree (Mr. Newmark), who talked about businesses' practical experience in his constituency and the fact that this Government's policies are losing businesses to overseas locations.
	My party has responded intelligently and sympathetically to the plight of businesses struggling through the recession. Less than three months ago, we initiated a debate that focused on the key issues affecting entrepreneurs and small and medium-sized enterprises: the poor take-up of small business rates relief; empty property rates; the failure of the local authority business growth incentives scheme effectively to promote business growth; the need to allow local authorities devolved autonomy to apply local business rate discounts; and, most importantly, the rise of 5 per cent. in business rates and the end of the transitional rate relief scheme. My party has outlined detailed and fully costed proposals designed to assist businesses in the current climate, not least a national loan guarantee scheme, a cut in corporation tax and payroll taxes for small companies, and deferred VAT for small businesses.
	Given the time, I probably will not be able to discuss those matters in detail, so it might be appropriate to deal with the desperate spin of this Government in claiming that the Conservatives have no policies to deal with the recession. That comes from a party that secured the support of 15.7 per cent. of the electorate less than two weeks ago. Indeed, the conceit that the Labour party was pro-business was never supported by any demonstrable evidence. For Labour, business has always been a milch cow to fund its hare-brained schemes, fiscal mismanagement, bureaucracy and debt boom. Last week, the Prime Minister appointed Sir Alan Sugar, the born-again Labour supporter, as the enterprise tsar, but a poll in  The Independent found that 81 per cent. of business leaders believed that that was
	"a desperate attempt by Gordon Brown to boost his public popularity".
	As we know, the words "Gordon Brown" and "public popularity" are oxymoronic.
	It is no wonder that the Labour party cannot even give away tickets for its business fundraisers. The business community has lost what little faith and trust it had in this tired, discredited, washed-up Government, who have always governed in their own interests, not those of the people of this country. They cannot even get their spin right, as we saw today in the spat between the Chief Secretary and the surrogate Chancellor of the Exchequer, the Secretary of State for Children, Schools and Families. The Government's public expenditure and taxation plans are incoherent and incredible, just at a time when business desires clarity and leadership.
	This Government have never understood that without a thriving business sector based on sound Government finances, lower taxes and falling public debt, we cannot deliver real long-term improvements in our public services. They have had 12 years to harness the talent, flair and genius of our wealth creators, but they have comprehensively failed, leaving the ambitions of thousands in tatters. Once again, as in 1979, it will fall to a Conservative Government to rescue our economy, restore our mercantile spirit and repair the calamity of Labour's dozen wasted years.

Sarah McCarthy-Fry: It is with enormous pleasure that I wind up the debate. In response to the hon. Member for Peterborough (Mr. Jackson), it is only too clear that only this Government have been helping businesses through the current economic recession, and only this Government are prepared to take action now. In her opening remarks, my right hon. Friend the Minister for Regional Economic Development and Co-ordination eloquently made the point that we fully recognise the impact of the current economic climate on businesses across the country. That is why we have taken real action now to help business through this economic downturn.
	The hon. Member for Falmouth and Camborne (Julia Goldsworthy) took us through her contribution at breakneck speed. I appreciate why she did that, but it was sometimes difficult to keep up. I agreed with her critique of the Opposition motion, and I, too, noticed the striking similarity with the motion tabled on 25 March. I am sure that we all accept the importance of business rates, but I agree that the motion is narrow and ignores other issues about help for businesses.
	I am afraid that that is as far as I can go in agreeing with the hon. Lady. I do not accept that our actions are tinkering at the edges, because I believe that they are giving real help to businesses now. I was disappointed that she mentioned our VAT cut, because despite the complaints from both Opposition parties, which did not believe that it would be effective, Office for National Statistics data show that the cut has been passed on to consumers in around two thirds of prices and has contributed to recent falls in inflation. In January, the Institute for Fiscal Studies said that the VAT cut had had the same effect as a 1 per cent. cut in interest rates, and in February Goldman Sachs said:
	"The VAT cut appears to have had a clear positive impact."
	My hon. Friend the Member for Sheffield, Attercliffe (Mr. Betts) made a thoughtful and knowledgeable contribution, and I particularly welcome his comments about revaluation, which put the record straight after the opening contribution by the hon. Member for Putney (Justine Greening).
	The hon. Member for Northampton, South (Mr. Binley) made his contribution in his inimitable way, and he confined his remarks to small business rate relief. This Government introduced the scheme in the Local Government Act 2003, because we recognised the disproportionate burden that rates can have on small businesses. I am disappointed that the Opposition did not support that Bill on either Second or Third Reading.
	The hon. Gentleman made a point about making small business rate relief automatic, which was suggested in a private Member's Bill introduced by the hon. Member for Mid-Worcestershire (Peter Luff). It would present considerable challenges for local authorities, as they would themselves need to establish whether a ratepayer occupied more than one property. I cannot see how local authorities could do that if the ratepayer's property crossed local authority boundaries. There are difficulties with transferring that responsibility from businesses to local authorities, and we must consider whether it would be an administrative burden.
	The hon. Member for Northampton, South also mentioned Wales, but the system is not totally automatic there. It is only partly automatic, and the scheme is different from ours. However, we are sympathetic to the aim of finding ways to support small businesses through the economic downturn, and we have been considering what more we can do to improve the take-up of small business rate relief. We have already taken steps to amend legislation for 2009-10, so that all eligible businesses in new properties can receive rate relief from their first date of occupation. We are discussing with the Local Government Association the practical concerns—they are genuine practical concerns—to avoid an automatic scheme, which would award relief to businesses that are ineligible because they occupy multiple properties. I am happy to meet the hon. Member for Mid-Worcestershire to explain the position further. I believe that there is an outstanding meeting, at which he was due to meet my predecessor, and I am more than happy to take that up.
	My hon. Friend the Member for Coventry, North-West (Mr. Robinson) spoke about a business improvement district project in his constituency. I do not have the details, but I am happy to discuss it with him further outside the debate.
	I assure the hon. Member for Hemel Hempstead (Mike Penning) that his concerns were certainly not ignored. There was a concern that not all Back Benchers would have the opportunity to speak, and I am glad that the hon. Gentleman had the opportunity to make his point. To respond to it, it is generally the case that property must be capable of beneficial occupation before it can be brought into the rating list and be liable for empty property rates. The issue is obviously so important that the hon. Gentleman is not even listening. There are some exceptions to what I outlined. When the property is close to being complete and building work has stopped, the general rule is that property not capable of beneficial occupation is not rateable. I am more than happy to meet the hon. Gentleman and discuss his concerns further. However, I repeat that the general principle is that, if the property is not capable of beneficial occupation, it is not rateable.
	I am grateful for the considerable knowledge and expertise of my hon. Friend the Member for Southampton, Test (Dr. Whitehead) on local government finance. I was heartened by his exposing the holes in the highly selective Opposition argument.
	The hon. Member for Braintree (Mr. Newmark) raised concerns about businesses' ability to pay their business rates. That is precisely why we have introduced the help with cash flow.
	Many hon. Members mentioned the deferral scheme. We recognise that businesses need help now to ease their cash flow when money is tight. That is why we introduced the deferral scheme for business rates. It is designed to smooth the effects of the inflation spike of 5 per cent. in September 2008, which would have meant an impact on businesses' cash flow this year. In the Budget, the Chancellor forecast that RPI inflation would fall to minus 3 per cent. by September 2009. The impact of uprating if RPI is negative would be to reduce total business rates in cash terms in 2010-11.
	The hon. Member for Putney asked how the full deferral of 60 per cent. could be delivered if the scheme is introduced halfway through the year. The deferral scheme will come into force at the end of July—that was made clear when it was announced. The scheme will offer the full deferral of 60 per cent. of the increase due to inflation and transitional relief by adjusting the instalments of business rates that remain outstanding.
	My hon. Friend the Member for Sheffield, Attercliffe mentioned revaluation. Regular revaluations are an important part of the rating system as they maintain fairness between all ratepayers. Revaluation ensures that each business contributes, based on up-to-date information. As my right hon. Friend the Minister said, all rateable values will be published at the end of September. At the same time, we will provide the business rates calculator to help ratepayers estimate their rates bill for 2010. By October, ratepayers will be able to estimate their 2010 rates bill, using their actual 2010 rateable value.  [Interruption.]

Sarah McCarthy-Fry: For ratepayers who face increases at the 2010 revaluation, we will introduce transitional arrangements to phase them in and consult during the summer about the shape of those arrangements, which will benefit businesses in 2010-11.
	The Government have recognised the problems that many businesses face. We are committed to doing all we can to help businesses through the testing times. We are providing targeted, short-term support to aid business cash flow. We will continue to support businesses through the difficult economic times, and I commend our amendment to he House.
	 Question put (Standing Order No. 31(2)), That the original words stand part of the Question.
	 The House proceeded to a Division.

Paul Clark: I beg to move,
	That, for the purposes of any Act resulting from the Driving Instruction (Suspension and Exemption Powers) Bill, it is expedient to authorise—
	(1) the imposition of fees in connection with exemptions from prohibitions concerning registration, and
	(2) payments into the Consolidated Fund.
	I kept my remarks on the money resolution brief, but may I also put on record our thanks to the constituent of the hon. Member for Dunfermline and West Fife (Willie Rennie), Lesley Anne Steele, in coming forward in what must have been difficult circumstances, and thereby bringing this matter forward to where we have reached today?
	For the purposes of any Act resulting from the Driving Instruction (Suspension and Exemption Powers) Bill, it is expedient to provide a power in uncommenced provisions in the Road Safety Act 2006 to charge a fee for the costs incurred as a result of the exemption arrangements that enable partially qualified driving instructors to provide instruction for payment. The Bill amends uncommenced provisions in the 2006 Act, in particular those affecting sections 124 and 129 of the Road Traffic Act 1988. Section 129 enables trainee driving instructors to apply for a licence that permits them to offer instruction for payment. The registrar of approved driving instructors, who is an employee of the Driving Standards Agency, may charge a fee in connection with such an application—that fee currently stands at £140 per licence granted.
	The existing trainee licence scheme is quite rigid in terms of its entry requirements. Applicants must have passed the first two of the three approved driving instructor qualifying tests. However, the 2006 Act envisaged more flexible qualifying arrangements for trainee instructors. Trainee instructors will obtain practical experience of providing tuition through the granting of exemptions from the requirement to be registered, as provided for in the uncommenced provisions of the 2006 Act. Unfortunately, that Act does not provide for a fee to be charged in connection with these exemption arrangements. The DSA needs to be able to continue charging trainee driving instructors a fee in connection with applications to give paid instruction while working towards admittance to the register of qualified instructors.
	If the DSA were unable to pass on to applicants its costs for processing those exemption requests, they would fall on the agency's other customers and I am sure that the House would agree that that would be unfair. Alternatively, the DSA would not commence the new provisions and would continue to rely on the existing trainee licence regime. That would deny trainee driving instructors the more flexible qualifying arrangements envisaged in the 2006 Act.
	We shall be introducing an amendment to the Bill to provide for the charging of fees in connection with the exemption from this registration. It is intended to replace the fee-charging provision that supports the existing trainee licence scheme. It is for this reason that the Ways And Means resolution is being introduced and, on that basis, I commend the resolution to the House.

Schools (Manchester)

Nadine Dorries: The hon. Gentleman has pre-empted part of what I was going to say. I also have a Copart division in my constituency, in Stewartby. I agree that when the compliance review takes place, consumers, members of the scrappage industry and other interested parties should have the opportunity to contribute to the review.
	Problems with the scheme are evident after only a month of its operation. For example, there is limited consumer choice. There is also a focus on new car sales, instead of the entire motor trade. Of course, the scheme was introduced, practically the night before the Budget and released the next day, as an emergency measure to boost the flagging car industry. One cannot say that it has failed in that—today's figures show sales of 60,000 cars in a month—but other parts of the motor industry are as important. Organisations such as Copart are suffering, but there is a way to improve the scheme in all its aspects without having a detrimental effect on new car sales.
	In his initial press release, the Secretary of State said that the scrappage scheme was intended to stimulate car sales across the whole motor trade and that the benefits of the scheme would be balanced with the needs of other sectors of the car industry, such as the second-hand car market. However, we know that that has not been the case. In Britain, the only way in which to secure the £2,000 support is for a motorist to acquire a new car or a new van by visiting a dealer. The dealers are generally tied to one manufacturer, as most new car dealers are. Obviously, documentation checks take place through the Driver and Vehicle Licensing Agency database. Manufacturers will invoice the Department for £1,000 and provide match funding. Some manufacturers offer additional incentive finance, whereas others drive a hard bargain, particularly with the smaller new cars, which elderly people tend to go for. Those manufacturers are driving a much harder bargain, with fewer incentives.
	The consequence is that there is no benefit for the modern second-hand market for people who might wish to trade up rather than commit the larger net amount to an entirely new vehicle. Some consumers who do not normally make new purchases will also be unfamiliar with the credit risk arising from the expensive capital purchase. I believe that some people from lower-income groups and the elderly are disadvantaged as a result. Many people who have a 10-year-old car have a 10-year-old car because they cannot afford to trade up to a new car. The difference between the 10-year-old car and the new purchase is pretty huge.
	A £2,000 saving from £8,000 or £10,000 is not that much for a retired couple in their mid-70s to 80s who have had their car for a long time—probably since just before they retired. They do not have much capital, so that reduction in price does not really help. If we had a way of helping such a couple access second-hand cars that were more reliable—after all, one of the reasons why the scheme was introduced is that 10-year-old cars are not as safe—I could definitely see that as an improvement in the scheme. It would boost the automotive industry as a whole rather than just the new car sector.
	There is no portable voucher. In Germany and California, they have a portable voucher scheme, whereby people can take their voucher wherever they wish to buy their car. They have much greater access to the market and to what is available. That empowers the people who hold the vouchers. They are not then subjected to one particular dealer, or to one particular type of car or manufacturer. They have the buying power because they have a voucher in their hand. We know that that system has been incredibly successful in California and Germany. Perhaps we do not have a portable voucher scheme because our scheme was brought in so quickly and hurriedly due to the circumstances that we faced at the time. Does the Minister believe, now that we have had more time to reflect on the matter, that he will consider the portable voucher scheme in the review that will take place after two months?
	I recognise that the strongest driving force behind the new scheme is car sales. My constituency is near Luton, where LDV is suffering its own problems and uncertainties, so I do not want to sound as though I am diminishing the importance of boosting new car sales. I am not. I believe, however, that the portable voucher, by enabling people to trade up, will provide a longer-term stimulus to the automotive industry and new car sales.
	There are also valuation problems. People receive £2,000, and it does not matter whether the car is worth more or less in individual part sales. It seems as though there could be some room for work there, too. If consumers are channelled into making scrapping arrangements solely through their local dealership, which will have arrangements with other scrappage dealers, that does not give the consumer power over where they can take their cars. They are tied in to the dealer—not only by the finance available from the Department and the dealer, but on the scrappage side, too.
	There are effects on the scrappage trade, too. We would be foolish to sit here and think that 60,000 new car sales and the scrapping of 60,000 cars this month, in addition to what already takes place, will not cause a spike in the scrappage trade that, in turn, will cause a downturn in prices. That is happening and as a result the scheme is suffering.
	The Department has not had time to make appropriate due-diligence checks on the organisations that will be intimately involved in delivering the scrappage element of the scheme. Copart in my constituency is a subsidiary of an American organisation and is one of the largest scrappage organisations in the UK where there are 1.5 million scrap vehicles every year. It would be good if the experts on this part of the scheme could be brought in for discussion, with due diligence being paid to how they deal with their scrappage and the effects that the scheme is having on their businesses.
	The scrap industry is suffering from cash-flow problems at present, as the price of scrap metal has fallen by 20 per cent. There was great anticipation of the scheme before it was launched and, although I have not had time to check today, I imagine that the fact that there have been more than 60,000 car sales this month means that the price of scrap has fallen even further.
	The capacity to deal with the volume of scrappage safely and in a sustainable way needs to be assessed. Nobody wants too few vehicles to be processed, but equally no one wants a car mountain. In the present state of the scheme, there is no strong commercial incentive for parties with large-scale capacity in vehicle scrappage to enter the trade chain. That is another good reason why the organisations to which I have referred should be brought into the review process.
	Another element is the EU's end-of-life vehicles directive, whose aim is to achieve a greening of the auto industry. The Department has said that the "green side of things" is secondary to the boost that the scrappage scheme will give the car industry, but I reject that. I am a member of the Energy and Climate Change Committee, and I believe that green considerations are equally important, as they have their own effect on the economy. The green side of the scrappage scheme needs to be given an importance equal to that of boosting the car industry, and we must make sure that people using the scheme are aware of it.
	The Department for Business, Enterprise and Regulatory Reform says that it has urged car manufacturers to review their vehicle disposal arrangements to accommodate demand, but manufacturers and most dealers are locked into sole-source agreements with particular vehicle takeaway companies for the first stage in the vehicle disposal sequence. As a result, any difficulties that arise can be resolved only when there has been a contractual failure and there are vehicle takeaway problems. That is too late, because by then the companies will already have failed to meet the criteria laid down for them. Making sure that that aspect of the matter is given full consideration is another reason why it is important that we have a review at the end of two months. Compliance with the EU's end-of-life vehicles directive may be harder to achieve if the scheme eventually achieves its target of 300,000 vehicles, with the bulk of vehicles being dealt with in a shorter space of time and causing the spikes in scrap management that I have described.
	I shall summarise my argument in three minutes. We need to make the scheme fully successful during the 10 months, for the benefit of the economy. No one doubts or disputes that—least of all me, given that my constituency is next door to Luton. As the scheme is constructed and operating, it may not deliver strong benefits for any part of the automotive industry over the longer period.
	It is clearly important that the scheme deliver good results for new sales, as that is how part-funding from manufacturers is being leveraged. However, its design has built-in disincentives for consumers to achieve maximum personal choice, and an example of that is the lack of a portable voucher that I mentioned earlier. I hope that the Minister, when he responds to the debate will say something about portable vouchers: has the Department begun to look at them, and does it think that there is any point in making them available? Will they be part of what is assessed in the review?
	The requirement that arrangements for vehicle scrappage can be made only through dealerships also limits consumer flexibility, and distorts business volumes in the scrappage industry. The scheme's focus on new sales also disadvantages other parts of the total automotive economy.
	The Department has stated that the scrappage industry and green aspects are secondary—an unfortunate and indefensible statement. The scrappage industry has already experienced some economic loss, and it would be wrong to raise environmental risks. Britain should take the opportunity of the compliance review that will be undertaken after the second month of the scheme to put in place new arrangements that open up consumer choice and spread the economic and green benefits across the whole of the automotive economy.
	Finally, it is worth considering whether there could be a longer-term scheme. The Government have recognised that the scrappage programme is important to stimulating the car industry. The present scheme may or may not end before a general election is called, but there may be scope for a longer-term arrangement, particularly one based on greater consumer choice and with clearer environmental credentials. So my main points are about: the portable voucher that people are given; the fact that environmental considerations are as important as the stimulation to the car industry; and consumers being given greater access, particularly in terms of the scrappage element of the scheme.

Ian Lucas: In addition to the compliance review, I am always ready to hear ideas for improvement of the scheme. I add the caveat that the scheme is time limited and budget limited. It has been very successful thus far, and if it was even more successful, the budget may be used up even more quickly than at present. It is a budget-limited scheme; I just want to make that absolutely clear. Representations may be made to me on the budget in due course, but the scheme is either time limited or budget limited, and the indications to date are that the budget will be used up within the time frame that was set when the scheme was announced.
	On the issue of whether purchasers have been able to afford a new car, early indications show that the people who are using the scheme include the elderly. One group who are most likely to take advantage of the scheme are those who—obviously—have had a car for more than 10 years and who directly respond to the scheme's large incentives.
	Of course, the incentives can amount to more than £2,000. I remember hearing on the first day that the scheme was introduced, I think, advertisements for offers of £3,000 and even more for particular vehicles. It appears that such offers have been very successful in encouraging cash buyers to purchase vehicles. The evidence does not indicate that elderly people are being deterred by the scrappage scheme; if anything, the initial evidence appears to be the contrary.
	Before the scheme was introduced, the Government looked at the issue of second-hand cars, but we excluded them because of the experience of other member states, which suggested that the inclusion of used cars would distort prices in the market. Having considered the situation, the Government decided that the available funds would be most effectively used in the new car market.
	On the question of the car mountain and whether the number of vehicles going to scrappage will cause a difficulty in the scrappage market, I should say that consultation again took place and car scrappage operators gave assurances that there would be capacity in the market to handle the scrappage of all 300,000 cars. To date, we have had no indication that that is not the case, but I should be interested to hear representations from that area of the manufacturing market. There appears, however, to be overall satisfaction with the capacity of the scrappage system in the current market.
	I actually have evidence myself of the scheme's success, because, strangely this week, having been newly appointed as the Minister responsible for the scheme, I received a letter from my local Toyota garage, which sold me my car some years ago. My vehicle is just over 10 years old and therefore eligible for the scrappage scheme, and in the letter's PS the garage told me:
	"As demand has vastly exceeded our expectations—most Toyota new car models are now in short supply."
	That is evidence from Wrexham, and I hope that it is an indication that the scheme will be successful, and that its good start will continue.
	I am very grateful to the hon. Lady for raising the debate, and I am anxious to listen to observations that hon. Members from all parts of the House make about the scheme. Clearly, it affects not just the new car market, but the used car market. As I said earlier, the industry is important not only to the new car sector but to the used car sector and the retail sector. For all those reasons, it is very important that, at this very difficult time, we support the industry as much as we can.
	 Question put and agreed to.
	 House adjourned.